BUD’S PLACE RV PARK · Internal Rate of Return 41.9% Equity Multiple 6.05 Favorable recourse...

A 127 Unit Mixed RV / MHP / Cabin Rental Investment Opportunity

BUD’S PLACE RV PARK

CARLSBAD, NM

N O N - E N D O R S E M E NT & D I S C L A I M ER N O T I C E

C ONFIDENTI ALITY & DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus &

Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to

provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained

herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to

the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the

presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the

financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this

Marketing Brochure has been obtained from sources webelieve to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information

contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or

completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark

of Marcus&Millichap Real Estate Investment Services, Inc.

© 2018 Marcus&Millichap. All rights reserved.

N O N-ENDO RSEMENT N O TICE

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's

logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any

agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective

customers.

A L L P R O P ERT Y S H O W I N G S A R E B Y A P P O I N T M E N T ON L Y .

P L E A S E CO N S U L T YO U R M A R C U S & M I L L I C H A P AG E N T F O R M O RE DE T A I L S .

OFFICES THROUGHOUT THE U.S. AND CANADA

www.marcusmillichap.com

http://www.marcusmillichap.com/

BUD’S PLACE RV PARKCARLSBAD, NM

EXCLUSIVELY LISTED BY

MATTHEW REEVESBroker of Records – NEW MEXICO

Office: (505) 445-6333License: 19583

As the leading specialists in the MHP/RV industry, our primary interest is in

giving you a clear understanding of the driving forces in the current

marketplace. Our evaluation is based of off verifiable data, market knowledge

and proven experience that we feel will serve your best interest at this time.

We invite you to thoroughly review this offering memorandum, schedule a

tour of the property and discuss any questions you may have. We promise to

provide you clear and accurate answers and together we will maximize this

opportunity to make the transition from where you are today to where you

want to be in the future in the most effective way.

GUIDELINES

The offering is being distributed exclusively by Marcus & Millichap REIS

to the investment community. Following the initial bids, the owner will select

an investor to purchase the property or request from a group of investors to

submit a best and final offer, from which one will be selected. The selection

will be based on a variety of factors including purchase price, contract terms,

financial strength, ability to close, timing and experience in closing similar

transactions.

Offers must be presented in writing and include:

• Price

• Source of capital

• Proof of funds

• Relevant experience

• Proposed schedule of due diligence and closing

• Amount of earnest money

• List of contingencies including committee approvals, possible 1031

exchanges, etc.

All interested investors are encouraged to schedule a property tour to visit the

community and the surrounding market with an approved representative to

fully appreciate its market position, quality and strong fundamentals.

W E L C O M E

05

MARKET OVERVIEW

04

03EXECUTIVE SUMMARY

01 PROPERTY DESCRIPTION

02

FINANCIAL ANALYSIS

BROKERAGE TEAM

TABLE OF CONTENTS

Executive Summary

Offering Summary

Investment Overview

Investment Highlights

S e c t io n 1


EXECUTIVE SUMMARY

PROPERTY SNAPSHOT

Property Description

Property Details

Amenities

Photos

S e c t i o n 2


PROPERTY DESCRIPTION

Bud’s Place RV Park was constructed between 2017 and 2019 and

consists of 91 RV pads, 16 cabins, and 20 mobile home pads. The

owner completed construction and leased up 91 RV pads at the end

of 2018. The 16 cabins construction is projected to be completed and

occupied by October of 2019.

There are 20 mobile home pads that are currently under construction

and will be completed prior to a new owner taking over. The owner

currently has a waiting list of customers who would be willing to

rent, or purchase park model homes and the current advertised lot

rent is $1000.

Bud’s RV park is one of the few parks in Carlsbad that has public

utilities. In addition, Bud’s place is in a favorable location regarding

electricity billing and enjoys some of the lowest utility costs in

Carlsbad.

The park is conveniently located close to area employment, retail, and

attractions and is regarded locally as having the best location for an

RV park in Carlsbad. The park is located 15 minutes from Carlsbad

Caverns and has luxury-style bathrooms, laundry room, and stocked

fishing pond for its customers to enjoy.

PICTURES

Financial Analysis

Operating Data

Se c t io n 3


RENTAL UNITS & INVESTMENT SUMMARY

Seller Normalized Pro Forma

Actuals Year 1 Year 2

Lot Rent Revenue $0 $0 $120,000

RV Revenue $977,180 $977,180 $1,008,449

Cabins Revenue $5,554 $352,800 $416,102

Annual Rent Revenue $982,733 $1,329,980 $1,544,552

Vacancy / Collections Loss $0 $66,499 $77,228

Total Revenue $982,733 $1,263,481 $1,467,324

Operating Expenses (Next Page) $284,876 $338,261 $430,238

Net Operating Income $697,858 $925,220 $1,037,086

Capitalization Rate 8.73% 11.57% 12.97%

Total POH / RTO Revenue $0 $0 $0

POH / RTO Exepenses $0 $0 $0

POH / RTO Net Income NO POH NO POH NO POH

Capitalized Revenues & Investment Summary

Comments

Park Owned Home Revenues - Not Capitalized

The RV revenue is based on 2019 average collected income for January through August then

annualized. Also, the owner has recently brought online 16 cabins. August was the only month for

total income collected for cabins which were $5,554. Year 1 cabin income displays 14 out of 16

cabins rented at $2100 per month. Based on the seller's disclosed financial documents, we feel

confident that the RV component boasts an annual occupancy of 89.5%. At this stage of the

underwriting, we are displaying these as 89.5% occupied due to the market demand for housing and

underwriting with a 10% vacancy and 5% collections loss.

Based on current seller disclosures, we feel that the normal operating expense ratio sits around 28.6%.

The owner owns three other RV parks in the area and can show a buyer the typical performance of

similar assets during a downturn. His average occupancy during 2010-2012 was reported to be 80%-

90%.

Finally, the Pro Forma models a new owner infilling and occupying 10 of the 20 mobile home lots

with a lot rent of $800 per month.

OPERATING EXPENSES

Seller Normalized Pro Forma

Actuals Year 1 Year 2

Total Revenue $982,733 $1,263,481 $1,467,324

Expense Category Notes on Expense Item

Real Estate Taxes $7,249 $7,249 $81,128

Insurance $17,769 $17,769 $18,160

Repairs & Maintenance $37,019 $40,650 $41,544

Water, Sewer, & Trash $27,720 $27,720 $29,245

Electricity $61,045 $61,045 $63,487

Cable & Internet $23,265 $23,265 $23,777

Security System $594 $594 $607

On-Site Manager Salary (Full Time) $54,859 $54,859 $56,066

Payroll Taxes & Expenses $5,497 $5,497 $5,618

3rd Party Management $0 $63,174 $73,366

Office Expenses $12,504 $12,504 $12,779

Legal & Accounting $3,463 $5,000 $5,110

Licenses / Permits / Dues $17,542 $200 $204

Advertising $9,615 $12,000 $12,264

Bank Fees $6,735 $6,735 $6,883

Total Expenses $284,876 $338,261 $430,238

Expense Ratio 29.0% 26.8% 29.3%

Net Operating Income $697,858 $925,220 $1,037,086

Capitalization Rate 11.57% 12.97%

Verified through seller provided documentation

Verified through taxing authority at purchase price


Normalized ($150 per lot & $1500 per Cabin / Per Year)










Normalized to industry averages (5%)


PRO FORMA

Year 0 $5,996,250

Down Payment on Loans $1,998,750 5.00%

Allowance For Cap Ex $63,500 25

Normalized Pro Forma

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Mobile Homes added in Period - 10 10 0 0 0 0

Mobile Home Lots Occupied (20 Total Lots) 0 10 20 20 20 20 20

Lot Rent in Period $1,000 $1,000 $1,032 $1,065 $1,099 $1,134 $1,170

Lot Rent Revenue $0 $120,000 $247,680 $255,600 $263,760 $272,160 $280,800

Other Property Revenue $1,329,980 $1,424,552 $1,470,137 $1,517,182 $1,565,732 $1,615,835 $1,667,542

Collections Loss (5%) $66,499 $77,228 $85,891 $88,639 $91,475 $94,400 $97,417

Total Revenue $1,263,481 $1,467,324 $1,631,926 $1,684,143 $1,738,017 $1,793,595 $1,850,925

Operating Expenses (29.3% Expense Ratio) $338,261 $430,238 $478,502 $493,812 $509,609 $525,905 $542,715

Net Operating Income $925,220 $1,037,086 $1,153,425 $1,190,330 $1,228,408 $1,267,690 $1,308,210

Annual Debt Service $420,642 $420,642 $420,642 $420,642 $420,642 $420,642 $420,642

POH Income $0 $0 $0 $0 $0 $0 $0

POH Expenses & Collections Loss (50%) $0 $0 $0 $0 $0 $0 $0

Net Income $504,578 $616,444 $732,783 $769,688 $807,766 $847,048 $887,568

Cash-on-Cash Return 24.5% 29.9% 35.5% 37.3% 39.2% 41.1% 43.0%

Total Return (Includes Principal Paydown) 30.5% 36.2% 42.2% 44.3% 46.5% 48.8% 51.1%

Real Estate Value Per Year (10% Cap Rate) $9,252,197 $10,370,857 $11,534,245 $11,903,303 $12,284,079 $12,676,899 $13,082,096

Loan Balance Remaining $4,986,030

Net Proceed from Sale (with 6% Selling Costs) $7,311,140

Internal Rate of Return 41.9%

Equity Multiple 6.05

Favorable recourse financing should be available

for this property. Non-recourse financing may be

available for qualified buyer. Reach out to our

team if you need assistance finding quality

debt.

Uses of Capital 1st Position Loan

Loan Amount

Interest Rate

Amortization

Financing Notes

Allowance For Cap Ex is based on $500 per

unit

Market Overview

Location Overview

Market Research

Demographics

S e c t io n 4


LOCAL MARKET INFORMATION

Located in the southeastern part of New Mexico, Carlsbad straddles

the Pecos River and sits at the eastern edge of the Guadalupe

Mountains

Carlsbad is a hub for Potash mining, petroleum production, and

tourism. Carlsbad Caverns National Park is located 20 miles

southwest of the city, and Guadalupe Mountains National Park lies

54 miles southwest across the Texas border. The Lincoln National

Forest is to the northwest of town.

As of recent, Carlsbad has experienced a “boom”. The city is

leading in the production of and natural gases across the entire area,

causing an increase in the employment rate. Due to this increase,

families and individuals have begun to migrate to Carlsbad.

DEMOGRAPHICS // BUD’S PLACE RV PARK

32,202Total population within a 5-mile radius

GENDER

49.90%

50.10%

$ 74,112Average household income within a

5-mile radius

$ 56,121Median Property Value

13,724Total households within 5-mile radius

1,878From 2010

AREA MAP

FLOOD MAP

LOCAL ATTRACTION

LOCAL NEWS

Brokerage Team

Brokerage Team


S e c t io n 5

SALES AGENT

TEAM LEADERIn the 18 years, Glenn has been in commercial real estate, He has successfully transacted more than 235 properties forhis clients. In 2018 alone, Glenn sold 36 mobile home communities as a solo broker. In addition to his work as a broker,Glenn has owned and operated mobile home parks, operated several small businesses, and owned other commercialreal estate assets.

Glenn joined Marcus and Millichap in 2019 with the vision of assisting buyers and sellers Nationwide with theirmanufactured housing transaction needs. His team is quickly gaining a reputation as one of the top brokerage teams inthe industry.

Glenn is married to his lovely wife, Cassidy, and has three children. Glenn resides in Wilmington, NC.

Glenn EstersonVice President

Michael Escobedo began his professional career in real estate brokerage in 2018 by joining the Phoenix Marcus &Millichap team. Thus far, Michael has received mentorship from some of the top-performing professionals in thecompany and was awarded the distinguished “Pace Setter Award” in early 2019, an award is given only to agents whomeet the highest company standards during their first four months with the firm.

In June of 2019, Michael joined Glenn Esterson and now focuses on manufactured home park sales nationwide andthroughout Canada. Michael brings an unparalleled level of professionalism and service to his clients and his work ethicand dedication are routinely mentioned and admired by both his co-workers and clients.

Before joining the Marcus & Millichap family, Michael was a distinguished collegiate wrestler at Michigan StateUniversity and was a 2x individual Indiana state champion while in High School. Michael received his bachelors degree insocial science in 2007.

Michael EscobedoAssociate

Sallie WhitehurstLicensed Assistant

Glenn EstersonVice President

Charles DeHartAssociate

Michael EscobedoAssociate

Brokerage Team

NON-ENDORSEMENT & DISCALAIMER NOTICE

CONFIDENTIALITY & DISCLAIMER

The information contained in this marketing brochure is proprietary and strictly confidential. It is intended to be reviewed by the party receiving itfrom Marcus & Millichap. This marketing brochure has been prepared to provide summarized, unverified information to prospective purchasers, andto establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough duediligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income orexpenses for the subject property, the future projected financial performance of the property, the size and square footage of the property andimprovements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with state and Federal regulations, thephysical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions tocontinue its occupancy of the subject property. The information contained in this marketing brochure has been obtained from sources we believe tobe reliable, however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichapconducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness ofthe information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is aservice mark of Marcus & Millichap Investment Services, Inc.@2018 Marcus & Millichap, All rights reserved.

NON-ENDORSERMENT NOTICE

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. Thepresence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said occupation ofMarcus & Millichap, its affiliates or subsidiaries, and any agent, product, service, or commercial listing of Marcus & Millichap, and is solely intended forthe purpose of providing tenant lease information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLYPLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS

OFFICES THROUGHOUT THE U.S. AND CANADA

www.marcusmillichap.com

http://www.marcusmillichap.com/

EXCLUSIVELY LISTED BY

MATTHEW REEVESBroker of Records – NEW MEXICO

Office: (505) 445-6333License: 19583

BUD’S PLACE RV PARK · Internal Rate of Return 41.9% Equity Multiple 6.05 Favorable recourse...

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