Ever own a marina?

[goboatingnow]

I was also involved in a potential purchase ( and also a sailing school )

Have a look at the return on capital employed. It can look like a train wreck

Dave

[BandB]

Originally Posted by fstbttms

Not true. The Clean Marina program is strictly voluntary, regardless of which state the marina in question happens to be located in.

Yes and no. When you're leasing the property from the state, or a utility or town often that will be required in the lease. If you're on Florida submerged lands, not required, but impacts your rent. And in other cases getting your permits from the local government will require it. So while there are not state laws, there are often more subtle ways it is required on new marinas and/or new owners.

[BandB]

Originally Posted by goboatingnow

I was also involved in a potential purchase ( and also a sailing school )

Have a look at the return on capital employed. It can look like a train wreck

Dave

Yes, so a lot depends on whether you have to finance and, if so, how much. In today's world, docks are terribly expensive because it's not dig a few holes and put in posts then put boards on top anymore.

Someone also mentioned municipal marinas above and in many cases they become your competition. If they are operated not for a profit, then you have a difficult time competing. Especially in some areas where towns are allowing a couple of days free dockage to transients.

Now, all that said, if I was looking for something to do full time, I'd probably consider a marina. I was looking as a primarily absentee owner and didn't see that working.

Someone also mentioned on mobile home parks knowing the reason for selling. Very important on marinas too. And if what they say doesn't make sense then it's probably not true. And financial statements and tax returns on privately owned marinas are often suspect. However, know that it's probably doing at least as well as they report taxes. When they claim it's doing better, then you know they're lying-either to the IRS or you or both.

Get local knowledge. For instance, right now New River (Ft. Laud) marinas face more train traffic on a train trestle that crossed. In 2009 it was closed 11 times a day for 20 minutes. The fear is that it will soon be many times that. Oh, clearance closed is 4 feet.

Some of the better choices I've seen:

-Undeveloped but approved and across the canal from a 100% full marina.

-Owned by resort owners association or developer and they want out of the business. Often great because clientele already there.

-Built my developer with intent of selling slips and failed so now ready to move on. In many places dockominiums have failed as a concept.

-Owned by older couple ready to retire and kids have no interest or they have no kids.

-Foreclosures. Banks become very anxious to move them. I saw one that cost $14 million new, bank was owed $11 million, they sold it for $3 million.

If building or starting one, I'd want one that had all major permits already in hand. Otherwise it can take three years before you even start construction.

One thing too is to know what ability you have to increase or reduce number of slips and to reconfigure. Many marinas need more larger slips than they have and doing that can be key.

[Campbellcruiser]

Originally Posted by Lancerbye

Are you talking about the one that is about 30 kms south of Nanaimo. I worked at that one for a few years doing part time maintenance. It is presently in recievership and is for sale. It has a lot of potential but also some problems. It hardly ever has available moorage, except in the summer when many of the boats are out cruising.Should have been profitable ,but other problems plagued it.

Are you talking about Boat Harbour? I grew up out there. The one I was looking at is on Stewart ave, Newcastle channel. It's beside Newcastle Marina
I almost got moorage at Boat Harbour, but it is run by guys in another city with a booklet of dos and donts. Wasn't comfortable leaving my boat somewhere that doesn't have a caretaker or someone onsite at least once in awhile.

[Oregon Waterman]

Originally Posted by Paul Annapolis

Ever own a marina?. With all due resPect. .. seek real professional assistance or consultants or go work in one for a few years. Asking such a question on this forum and exPeCTing anything other than cursory replies makes me raise my eyebrows. An analogue would be to going on a forum for people who like to cook and asking for advice on opening a restaurant. A MarTina is a major league serious investment and business undertaking and I could easily come yo with a hundred questions for you. ... in a minute. ..

Your syntax and spelling make me raise my eye brows.

[Campbellcruiser]

Originally Posted by Oregon Waterman

Your syntax and spelling make me raise my eye brows.

That's funny. ....me too. Maybe fat fingers.

[Lancerbye]

Originally Posted by Campbellcruiser

Are you talking about Boat Harbour? I grew up out there. The one I was looking at is on Stewart ave, Newcastle channel. It's beside Newcastle Marina
I almost got moorage at Boat Harbour, but it is run by guys in another city with a booklet of dos and donts. Wasn't comfortable leaving my boat somewhere that doesn't have a caretaker or someone onsite at least once in awhile.

I was thinking Page Point.

[Campbellcruiser]

Originally Posted by Lancerbye

I was thinking Page Point.

Ah interesting. My sailboat is moored there right now. I've been wondering why it was for sale! Wish I had the coin to buy it, but 3.5m is a bit too rich for me. Would love to learn more about what happened there. Could you PM me?

[GRFaler]

Yes I did for 10yrs.

[denverd0n]

Originally Posted by GRFaler

Yes I did for 10yrs.

Uh... I suspect that the OP was hoping for a bit more in the way of details. You know, something that might help him in making his decision.

[capn_mark]

I have looked in the past. It is no different than buying any business, it is all about CASH FLOW. Do the numbers, and if the cash flow is marginal if you factor in a salary for you running the place, you are just buying yourself a job. If the numbers look good with exaggerated maintenance expense, interest cost (6% not 3%), lower than expected occupancy, large contributions to a sinking fund to cover future dock replacement, as well as the inclusion of a manager salary and dock hand pay, then it's probably worth a further look. If you are paying cash, then I would seriously look at other passive options in equities for comparison in return. You can easily sustain 6% through dividends and very modest gains in a good stock portfolio. It's all about the numbers, gotta remove the emotional part of 'it would be cool to own a marina'. Good luck with your analysis!

[BandB]

Originally Posted by capn_mark

I have looked in the past. It is no different than buying any business, it is all about CASH FLOW. Do the numbers, and if the cash flow is marginal if you factor in a salary for you running the place, you are just buying yourself a job. If the numbers look good with exaggerated maintenance expense, interest cost (6% not 3%), lower than expected occupancy, large contributions to a sinking fund to cover future dock replacement, as well as the inclusion of a manager salary and dock hand pay, then it's probably worth a further look. If you are paying cash, then I would seriously look at other passive options in equities for comparison in return. You can easily sustain 6% through dividends and very modest gains in a good stock portfolio. It's all about the numbers, gotta remove the emotional part of 'it would be cool to own a marina'. Good luck with your analysis!

If you have to finance one, I'd strongly recommend against. Way too many variables in ownership for that. One storm can destroy you. Yes, you can insure but that doesn't mean you have a business left. You're subject to weather, to environmental laws changing, to economy and boating interest, to competition,

You are right about buying oneself a job. If that's one's dream job great. But it also is likely a 7 day a week, 16 hour days type job, during the season. And even during off season long weeks as then you can't afford a staff to do the work.

As you say, it's got to not only be positive cash flow wise but also allow enough to be set aside for capital replacements. Docks deteriorate. Equipment does as well, exposed to the elements as it is. Even dredging may be required. You need to earn at least 2.5 times the value of your labor after all expenses to justify self employment in that way.

It needs to justify itself in the worst cases you can picture. Take the lowest occupancy you can picture, the least fuel sales. Then add up all the expenses you'll incur. Now take that number, EBITDA before owner's salary. Does it leave enough to cover 2.5 times the value of your time, replacement of docks every five years or so (8-10 is likely but 5 is very possible), a 10% return on your investment (risky investments should get more than just 6%)? Then how do you feel about being a slave to the marina? Or can you afford others to run it, but true professional marina managers?

The gimmick in marinas for sale being advertised is they always want to sell you on what it could be doing. Most say something like "Could get permits to add 40 more slips" or "Space to add a dry storage unit" or "Fuel business could be increased 50%" or "Currently only 60% full, active owner should increase to 95%." If all those things were so easy, then why are the current owners selling? That's really a key question. There was a rash of Florida marinas for sale a couple of years ago. It was because they didn't own the water rights, but the state did, and there was talk of a huge increase in the rental rate.

Not all negative however. Many marinas are very poorly run. The owners are doing it more as a hobby than a business. So a businessman can improve things greatly. A small example. I saw one where all the monthly invoices were being hand prepared and mailed. Checks were being received as payment, no credit cards, and manually processed. They had a person full time just handling billing and collections. Nothing was being done regarding past due until months would go by. Marina operators in our area require cards or bank information on file and automatic monthly processing, everything is computerized, any payments that don't go through are immediately addressed. Many marinas do zero advertising and just a little advertising could fill them.

We've looked at a lot of marinas over the last couple of years and none of them was worth it as an investment. There is one that if we wanted a business to personally operate, might interest us. But we don't want to be stuck at the dock.

[Moosemiester]

As a small business owner all good advice. A few more points:

Do you like listening to people complain? Have you ever managed people at the lower end of the salary range? Have you ever worked in a business that serves people with money using people who don't have much?