1,153 Acre Mobile Home Development (resort)

[Shane Melanson]

Investment Info:

Mobile home commercial investment investment in Bracebridge.

Purchase price: $8,500,000
Cash invested: $6,500,000
Sale price: $17,000,000

1,153 Acre Land Lease Resort Development (mobile home park on water- 2 seperate resorts: Bonnie Lake Resort and Shamrock Bay Resort)

Hold Time: 3.5 Years

Returns to Investors 48% (12%+ annualized)

Project Size: Acquired for $8,500,000 sold for $17,000,000 in 2014

Location, Muskoka Ontario

What made you interested in investing in this type of deal?

Partner brough the deal to me. Significant value add, underutilized land. Great demographics

How did you find this deal and how did you negotiate it?

Direct to vendor

How did you finance this deal?

Cash of $6.5M
VTB with vendor $2.5M
Self financed- very difficult for construction financing in this asset class

How did you add value to the deal?

I could write a 40 page book on the value Add
Raised rents
Expanded 1 park from 118 sites to 286 and the other site from 280 to more than 1,100 sites
Reduced management - with CFO and sales team and 1 management for both

What was the outcome?

Paid investors more than $3.5M in profit, along with cash flow from operations

Lessons learned? Challenges?

Too many:
Importance of right partners
Strong GP - financials
Supporting LP's
Sales
Cash flow
Debt and structuring it correctly
VTB (vendor take back)
Negotiations
Contractors
Sub contractors
HR
Staff
Small cities
Seasonal projects

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Crupi Law- increible lawyer.