All Forum Posts by: Account Closed

@Phil B. -

Thanks for the great info and advice. This place comes with a waiting list too. I like what you said about offering varying lease terms.  Hopefully, I'll be able to find a slightly-above-equilibrium price which will allow  a small amount of turnover (which will free up the individual slips for sale.

If everything goes according to plan, I'll also be living on the Gulf in about 9 or ten years. Thanks again!

Dion DePaoli , Seriously, thanks for the solid advice. I actually did what you said late this afternoon and told the lender that I wanted to do it that way. His advice was that I should have a survey done and have the easement, parking area, and slips divided into separate parcels, and then based on the appraisal, that they would give me clear title to each of the slips as I paid their respective parts of the overall balance down. Because the appraisal shows the entire dock as only being valued at $19k, I can pay for the individual slips and have clear title to them at less than a thousand bucks per. I have to admit that on some level, I felt like I should keep my plan hush hush. But after finding out that it will only cost $750 for the surveyor, plus filing fees for the newly created parcels, it will really simplify things, and ensure that no one else has encumbrance issues in the future. I'll probably donate the access drive to the city to avoid paying taxes on it after I sell the slips off, since it only constitutes about 10% of the original lot's total area, and would ensure that everyone is able to access the dock in the future. Thanks again for taking the time to give me some good coaching on this deal.

Wayne Brooks - because Alabama Power technically owns the first 10 feet of water extending horizontally from the shore, the only way to transfer any right to docks, etc, is through licensing. I suppose our situation here in AL is unique in that we can't "own" boat houses, etc. Thanks again for your help.

Dion DePaoli , Thanks for the advice. I suppose I didn't explain the situation well. I am not talking about leasing the slips. I am talking about selling a permanent license for each, which is a fairly common practice here. Licenses on slips that rent for $1k annually sell for between $1250 and $1500. The situation is unique in that the property is zoned as residential and commercial usage rights are grandfathered in from historical usage. (Which is why I can't change the name of the marina.) The financing is approved as of 1:30 p.m. today, based on the residential value of only the waterfront acreage and SFH by the road. The rest is "gravy."

BP Family,

I have stumbled upon a deal which could prove to be exceptionally lucrative, assuming my financing plan turns out to be feasible.

The property: A marina on a large lake in Alabama. It has 24 boat slips which rent for a total of $14,500 annually. oh, and there is a small, yet liveable, 3br/2ba house on the property.

The seller is asking $225k, but i think he'll come down to $200k or so, as the property has been for sale a couple years, and it is owned free and clear. (It's all "unearned equity"- it was inherited.)

In any case, let me give you the basics, and then the main question:

Down payment: $40k 

Mortgage balance: $160k

which is $858.91/month or $10,306.92 annually.

taxes are $2,500/year

insurance $2,400.year

so $14,806.92 would be almost entirely covered by boat slip rentals, not to mention

I do understand that this does not come close to meeting the 50% rule, but my wife and i would live there and we both have jobs, so even a little negative cash flow would not hurt us, since we'd have a house payment in absence of the deal anyway. So we could pay for maintenance and the 40k down payment 

Boat slips are in short supply (there is a waiting list) and can be sold for between $12k and $15K in this area, which would yield $288,000 on the LOW end of the range. which would pay off the mortgage and also yield somewhere between $60k and $80k in profit, depending on how quickly we sold them off, i.e., how much mortgage interest we avoided.

However, the financiers of the down payment (we'll call them "Mom" and "Dad" are concerned that it is not legal to "sell the slips" before the mortgage is paid off.

"Selling a boat slip" is really just selling a permanent license to the easement which accesses the slips and also a permanent license to the slip itself. As I understand things from my research on here, I can sell a license to use the property regardless of a mortgage on the actual property (and honestly, the due on sale clause would not even come into play, as i am not transferring an ownership interest in the actual real property. 

So the question, in summary, is: CAN I SELL LICENSES TO THE BOAT SLIPS IN ORDER TO PAY OFF THE MORTGAGE ON THE PROPERTY, or is there something illegal about doing that? (I don't think there is; i just want to give "Mom" and "Dad" some peace of mind.)

Hopefully, some of you have experience in this area. Maybe someone from Florida, Miama, Fort Lauderdale, Tampa, or better yet, someone in Mobile, Spanish Fort, Gulf Shores, Orange Beach (or any other keyword alerts I might be able to catalyze, lol)

And yes, I understand that the generic answer to this is that state laws vary and I should seek the advice of a competent attorney licensed to practice law in my state. I am going to. So save it. Lol. I just like getting investors' perspectives on this kind of thing as well.