Putting together Small marina deal

[Duane Symanietz]

I am about to put an offer in on a small marina with a common house and a few slips. It's on the the eastern shore of Lake Michigan in the state of Michigan . The house is shared by the slip renters and gives them A kitchen bathroom and spot to entertain guests . The whole place to include the slips needs to be redone but has sold out its slips because they are below Market value. Anyone have any experience putting a deal/offer like this together?

[Scott Matthew C.]

@Duane Symanietz

Could you clarify what you mean "you are placing an offer on a small marina." I'm having trouble understanding if you are buying a business(marina) that happens to have a house and rents the boat slips, OR, do you mean you are placing an offer on a traditional single family home that has boat slips?

Anytime you purchase a lakefront property you are evaluating to 2 kinds of properties. The first is the actual property(the house) and the second is the lake property(your lake rights & desire of the location). In this case, it also sounds like you are in need of evaluating the business side since it rents the boat slips.

You may want to consider a Letter of Intent (LOI)

I provided a few tips for you to think about. It's not a complete list. It's just enough for you to think about what it is you want to research and encourage other concerns you need to address. At the end of the day, I would advise that you hire an agent that is well versed with lake front property and business.  I wish you the best!

1) Evaluate ARV of the actual house.

2) Understand your "Water-related Property Rights" (get a professional surveyor)

- Classification of lands associated with water

- Riparian Land

- Littoral Land

- Prior Appropriation

- Shoreline Boundary

- Etc.

3) Verify Flood Plain

4) I'm fairly confident there is an HOA

- evaluate the HOA by-laws (you may find the current owners are in violation)

- confirm with the HOA dues are up to date

- confirm the transfer of HOA to the new owners, and it's transfer fee's

5) Find out the rent rolls for the boat slips. 

- confirm the gross

- confirm the operating expenses 

- confirm there is an actual lease agreement for the boat slip

- confirm it can operate as a business