OFFERING MEMORANDUM Desert Oasis RV Park · KW COMMERCIAL 4518 Everhart Road, Ste 101 Corpus...

KW COMMERCIAL

4518 Everhart Road, Ste 101

Corpus Christi, TX 78411JEFF [email protected]

Desert Oasis RV Park

OFFERING MEMORANDUM

PRESENTED BY:

EUNICE, NM

OFFERING MEMORANDUM

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Chad Bridges Keller Williams Realty New Mexico Broker of Record 806.252.6210 [email protected]

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www.kwcommercial.com 2

KW COMMERCIAL

4518 Everhart Road, Ste 101

Corpus Christi, TX 78411

JEFF [email protected]

Confidentiality & Disclaimer

OFFERING MEMORANDUM

All materials and information received or derived from KW Commercial its directors, officers, agents, advisors, affiliates and/or any third partysources are provided without representation or warranty as to completeness , veracity, or accuracy, condition of the property, compliance orlack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projectedfinancial performance of the property for any party’s intended use or any and all other matters.

Neither KW Commercial its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as toaccuracy or completeness of the materials or information provided, derived, or received. Materials and information from any source, whetherwritten or verbal, that may be furnished for review are not a substitute for a party’s active conduct of its own due diligence to determine theseand other matters of significance to such party. KW Commercial will not investigate or verify any such matters or conduct due diligence for aparty unless otherwise agreed in writing.

EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE.

Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspectionsand investigations including through appropriate third party independent professionals selected by such party. All financial data should beverified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independentprofessionals. KW Commercial makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financialdata or assumptions. KW Commercial does not serve as a financial advisor to any party regarding any proposed transaction.

All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data orperformance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can beestablished at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as marketconditions,vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by theparty with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions shouldbe discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complieswith applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, otherconsultants and governmental agencies. All properties and services are marketed by Coastal Bend in compliance with all applicable fairhousing and equal opportunity laws.

We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty orrepresentation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, orwithdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance ofthe property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

PRESENTED BY:

EUNICE, NM

http://www.kwcommercial.com

JSmith14

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JSmith14

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JSmith14

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JSmith14

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Chad Bridges Keller Williams Realty New Mexico Broker of Record 806.252.6210 [email protected]

Executive Summary

DESERT OASIS RV PARK |

PROPERTY OVERVIEW378 space RV park located in Eunice, NM near the Texas-NewMexico Border

PROPERTY FEATURESPriced way below replacement cost at only $3,439 per space.

All city utilities including sewer service

50 Amp breakers

Asphalt paved interior roads

3,000 sq. ft. rec center constructed in 2007, with offices,shower facilities and laundromat.

Immediate upside by reducing expenses.

Located in the Permian Basin and Wolfcamp Shale, two ofthe largest producing oil fields in the nation.

Great upside with 378 spaces available on 26.03 acres

Opportunity for additional income by sub-metering electricity

SALE PRICE: $1,300,000

SPACES: 378

PRICE PER SPACE: $3,439

YR 1 CAP RATE: 9.37%

PROFORMA CAP RATE: 14.35%

YR 1 NOI: $121,866

PROFORMA NOI: $186,486

ALL BILLS PAID LOT RENT: $400\Month

PROJECT SITE SIZE: 26.03 Acres

REC CENTER: 3,000 SF

YEAR BUILT: 2007

RENOVATED: 2016

5 YR IRR: 45.64%



PROPERTY OVERVIEW378 space RV park located in Eunice, NM near theTexas-New Mexico Border

LOCATION OVERVIEWThe property has a great location in the middle of thePermian Basin and thousands of producing wells. The parkis strategically located in the Wolfcamp Shale formation, oneof the largest shale oil fields in the world. Access to the parkis good as it is located near the intersection of Highways 176and 18 which connect to Midland-Odessa, Texas andHobbs, New Mexico.

EMPLOYMENTTenants are mostly long term, high income, oil field serviceworkers. Oil field activity has increased significantly in thearea. Other employees work at the nearby Urenco Uraniumreprocessing center, one of the largest uranium reprocessingcenters in the world. Other tenants work for the City ofEunice or the Eunice Independent School District.

URENCOURENCO Ltd. provides uranium enrichment services. Thecompany supplies uranium enrichment and associatedservices for the nuclear power generation, as well as sellsuranium components of enriched uranium product. Urencooperates worldwide. The URENCO USA facility beganoperations on June 11, 2010. Construction of the project willcontinue until the plant reaches the planned 5,700 tSW/acapacity. URENCO USA is the first enrichment facility to bebuilt in the US in 30 years and the first ever using centrifugeenrichment technology. Robust project, operational, andcorporate teams have been established to monitorconstruction activities, and to ensure training and proceduraldevelopment run to schedule. At the end of December 2016,capacity at URENCO USA stood at 4,700 tSW/a. It isanticipated that at full capacity the facility can producesufficient enriched uranium for nuclear fuel to provideapproximately 7% of America’s electricity needs. The facilityemploys +\- 350 persons.

Location & Area Employment




Site Plan





Aerial Photo & Park Photos




Additional Photos




Location Maps



INVESTMENT OVERVIEW

Price $1,300,000

Price per Space $3,439

CAP Rate 9.37%

Proforma Cap Rate 14.35%

5 year IRR 45.64%

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OPERATING DATA

Gross Scheduled Income $1,814,400

Other Income $10,000

Total Scheduled Income $1,824,400

Vacancy Cost $1,378,944

Gross Income $445,456

Operating Expenses $323,590

Net Operating Income $121,866

Pre-Tax Cash Flow

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Financial Summary




Loan AmountLoan Amount $975,000

Interest RateInterest Rate 5.500%

Amortization PeriodAmortization Period 20 Years

Periodic PaymentPeriodic Payment $6,707

Annual Debt ServiceAnnual Debt Service $80,483

MORTGAGE DATAMORTGAGE DATA 1ST LIEN1ST LIEN

For the Year EndingFor the Year EndingYear 1Year 1

Oct-2018Oct-2018

Year 2Year 2

Oct-2019Oct-2019

Year 3Year 3

Oct-2020Oct-2020

Year 4Year 4

Oct-2021Oct-2021

Year 5Year 5

Oct-2022Oct-2022

POTENTIAL RENTAL INCOME (PRI)POTENTIAL RENTAL INCOME (PRI) $1,814,400 $1,814,400 $1,868,832 $1,868,832 $1,924,897 $1,924,897 $1,982,644 $1,982,644 $2,042,123 $2,042,123

-Vacancy / Credit Loss-Vacancy / Credit Loss $1,378,944 $1,420,312 $1,462,922 $1,506,809 $1,552,013

EFFECTIVE RENTAL INCOMEEFFECTIVE RENTAL INCOME $435,456 $435,456 $448,520 $448,520 $461,975 $461,975 $475,835 $475,835 $490,110 $490,110

+Other Income+Other Income $10,000 $10,300 $10,609 $10,927 $11,255

GROSS OPERATING INCOME (GOI)GROSS OPERATING INCOME (GOI) $445,456 $445,456 $458,820 $458,820 $472,584 $472,584 $486,762 $486,762 $501,365 $501,365

-Operating Expenses-Operating Expenses $323,590 $272,334 $274,732 $277,173 $279,657

NET OPERATING INCOME (NOI)NET OPERATING INCOME (NOI) $121,866 $121,866 $186,486 $186,486 $197,852 $197,852 $209,589 $209,589 $221,708 $221,708

NET OPERATING INCOME (NOI)NET OPERATING INCOME (NOI) $121,866 $186,486 $197,852 $209,589 $221,708

-Annual Debt Service 1st Lien-Annual Debt Service 1st Lien $80,483 $80,483 $80,483 $80,483 $80,483

CASH FLOW BEFORE TAXESCASH FLOW BEFORE TAXES $41,383 $41,383 $106,003 $106,003 $117,369 $117,369 $129,106 $129,106 $141,225 $141,225

Value using Acquisition Cap RateValue using Acquisition Cap Rate $1,989,000 $2,111,000 $2,236,000 $2,365,000 $1,927,000

Loan BalanceLoan Balance $947,455 $918,356 $887,615 $855,141 $820,834

Loan to ValueLoan to Value 47.63% 43.51% 39.70% 36.16% 42.60%

Debt Service Coverage RatioDebt Service Coverage Ratio 1.51 2.32 2.46 2.60 2.75

Projected Sales Price (EOY 5)Projected Sales Price (EOY 5) $2,203,000 $2,203,000

Cost of SaleCost of Sale $110,150

Mortgage Balance 1st LienMortgage Balance 1st Lien $820,834

Sales Proceeds Before TaxSales Proceeds Before Tax $1,272,016 $1,272,016

SALES PROCEEDSSALES PROCEEDS

Purchase PricePurchase Price $1,300,000

+Acquisition Costs+Acquisition Costs $26,000

-Mortgage(s)-Mortgage(s) $975,000

+Loan Fees & Points+Loan Fees & Points $9,750

Initial InvestmentInitial Investment $360,750

INITIAL INVESTMENTINITIAL INVESTMENT

Before Tax Cash on CashBefore Tax Cash on Cash 11.47% 29.38% 32.53% 35.79% 39.15%

Internal Rate of Return (IRR)Internal Rate of Return (IRR) 45.64%

Acquisition CAP RateAcquisition CAP Rate 9.37%

Year 1 Cash-on-CashYear 1 Cash-on-Cash 11.47%

Gross Rent MultiplierGross Rent Multiplier 0.72

Loan to ValueLoan to Value 47.63%

Debt Service Coverage RatioDebt Service Coverage Ratio 1.51

INVESTMENT PERFORMANCEINVESTMENT PERFORMANCE

CASH FLOWCASH FLOW

Desert Oasis RV ParkDesert Oasis RV Park403 S. 4th Street, Eunice, NM

5-Year Cash Flow Analysis5-Year Cash Flow Analysis

Fiscal Year Beginning November 2017

Jeffery Smith, REALTOR®, Licensed Broker, General AppraiserJeffery Smith, REALTOR®, Licensed Broker, General AppraiserCoastal BendCoastal Bend14313 Dorsal Street, Corpus Christi TX 78418

Phone: 361-225-7907 © Copyright 2011-2017 CRE Tech, Inc. All Rights Reserved.

Email: [email protected] | http://x326096.yourkwagent.com/

DISCLAIMER: Year 5 sales price based on estimated NOI in year 6. All information is based on estimated forecast and are intended for the purpose of example projections and analysis.The information presented herein is provided as is, without warranty of any kind. Coastal Bend nor CRE Tech, Inc. assume any liability for errors or omissions. This information is notintended to replace or serve as substitute for any legal, investment, real estate or other professional advice, consultation or service.

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http://theanalystpro.com

http://x326096.yourkwagent.com/

Real Estate TaxesReal Estate Taxes $27,770 $27,770 $27,770 $27,770 $27,770

Property InsuranceProperty Insurance $22,312 $10,900 $10,900 $10,900 $10,900

Property ManagementProperty Management $78,200 $36,000 $36,000 $36,000 $36,000

Repairs And MaintenanceRepairs And Maintenance $12,600 $12,978 $13,367 $13,768 $14,181

Utilities : OtherUtilities : Other $135,379 $136,733 $138,100 $139,481 $140,876

Accounting Accounting And LegalAnd Legal $1,400 $1,414 $1,428 $1,442 $1,457

Licenses/permitsLicenses/permits $100 $101 $102 $103 $104

AdvertisingAdvertising $5,000 $5,050 $5,100 $5,152 $5,203

SuppliesSupplies $1,920 $1,939 $1,959 $1,978 $1,998

Miscellaneous Contract ServicesMiscellaneous Contract Services $12,000 $12,360 $12,731 $13,113 $13,506

Landscape MaintenanceLandscape Maintenance $6,000 $6,180 $6,365 $6,556 $6,753

Other Operating ExpensesOther Operating Expenses $20,909 $20,909 $20,909 $20,909 $20,909

TOTAL OPERATING EXPENSESTOTAL OPERATING EXPENSES $323,590 $323,590 $272,334 $272,334 $274,732 $274,732 $277,173 $277,173 $279,657 $279,657

NET OPERATING INCOME (NOI)NET OPERATING INCOME (NOI) $121,866 $121,866 $186,486 $186,486 $197,852 $197,852 $209,589 $209,589 $221,708 $221,708

For the Year EndingFor the Year EndingYear 1Year 1

Oct-2018Oct-2018

Year 2Year 2

Oct-2019Oct-2019

Year 3Year 3

Oct-2020Oct-2020

Year 4Year 4

Oct-2021Oct-2021

Year 5Year 5

Oct-2022Oct-2022

POTENTIAL RENTAL INCOME (PRI)POTENTIAL RENTAL INCOME (PRI) $1,814,400 $1,814,400 $1,868,832 $1,868,832 $1,924,897 $1,924,897 $1,982,644 $1,982,644 $2,042,123 $2,042,123

- - Vacancy / Credit LossVacancy / Credit Loss $1,378,944 $1,420,312 $1,462,922 $1,506,809 $1,552,013

EFFECTIVE RENTAL INCOME (ERI)EFFECTIVE RENTAL INCOME (ERI) $435,456 $435,456 $448,520 $448,520 $461,975 $461,975 $475,835 $475,835 $490,110 $490,110

+ + Other IncomeOther Income $10,000 $10,300 $10,609 $10,927 $11,255

GROSS OPERATING INCOME (GOI)GROSS OPERATING INCOME (GOI) $445,456 $445,456 $458,820 $458,820 $472,584 $472,584 $486,762 $486,762 $501,365 $501,365

INCOMEINCOME

EXPENSE DETAILEXPENSE DETAIL


Expense Detail AnalysisExpense Detail Analysis









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Expense Assumptions: Insurance: Insurance is decreased to $10,900 in Yr 2. Employee health insurance in the amount of $11,412 is removed from the budget. Property Management: Currently includes a manager and maintenance person at $78,200\year. This amount is reduced to $36,000 per year to reflect the typical expense for a park of this size. A manager and maintenance person could be hired for $1,500 per month each if they are given a free space to occupy in the park. Other Operating Expenses: Includes expenses such as: bank service charges, telephone expenses, computer and internet expenses, travel expenses, etc.

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Purchase PricePurchase Price $1,300,000

Year 1 Potential IncomeYear 1 Potential Income $1,814,400

Vacancy & Credit LossVacancy & Credit Loss 76.00%

Year 1 ExpensesYear 1 Expenses $323,590

Acquisition CAP RateAcquisition CAP Rate 9.37%

Sale Price - CAP RateSale Price - CAP Rate 8.20%

Acquisition CostsAcquisition Costs 2.00%

Annual Income IncreaseAnnual Income Increase 3.00%

Other Income IncreaseOther Income Increase 3.00%

Annual Expense IncreaseAnnual Expense Increase N/A

Loan Fees & PointsLoan Fees & Points 1.00%

Cost of Sale upon DispositionCost of Sale upon Disposition 5.00%

ASSUMPTION / INPUTSASSUMPTION / INPUTS

5-YEAR EQUITY YIELD & EFFECTIVE LOAN RATE5-YEAR EQUITY YIELD & EFFECTIVE LOAN RATE

Unleveraged InvestmentUnleveraged Investment

Cash Flow & 5-year YieldCash Flow & 5-year Yield

N $

0 ($1,326,000)

1 $121,866

2 $186,486

3 $197,852

4 $209,589

5 $2,314,558

+

Financing Cash FlowFinancing Cash Flow

& Effective Rate& Effective Rate

N $

0 $965,250

1 ($80,483)

2 ($80,483)

3 ($80,483)

4 ($80,483)

5 ($901,317)

=

Equity InvestmentEquity Investment

Cash Flow & 5-year YieldCash Flow & 5-year Yield

N $

0 ($360,750)

1 $41,383

2 $106,003

3 $117,369

4 $129,106

5 $1,413,241

Property IRR/Yield Property IRR/Yield = 21.09%= 21.09% Effective Loan Rate = 5.67%Effective Loan Rate = 5.67% Equity IRR/Yield = 45.64%Equity IRR/Yield = 45.64%

Positive Leverage! Positive Leverage! Leverage INCREASED the Yield by 24.56% Leverage INCREASED the Yield by 24.56%


5-Year Cash Flow Analysis5-Year Cash Flow Analysis










* Demographic data derived from 2010 US Census

Demographics Map


ETHNICITY 1 MILE 10 MILES 30 MILES

% HISPANIC 41.7% 42.0% 43.2%

RACE 1 MILE 10 MILES 30 MILES

% WHITE 97.2% 95.6% 85.5%

% BLACK 0.0% 0.0% 4.6%

% ASIAN 0.0% 0.0% 0.1%

% HAWAIIAN 0.0% 0.0% 0.0%

% INDIAN 0.0% 0.0% 0.7%

% OTHER 0.0% 2.6% 7.2%

POPULATION 1 MILE 10 MILES 30 MILES

TOTAL POPULATION 36 2,527 53,540

MEDIAN AGE 38.4 37.8 32.6

MEDIAN AGE (MALE) 32.2 32.0 31.7

MEDIAN AGE (FEMALE) 44.0 43.0 33.9

HOUSEHOLDS & INCOME 1 MILE 10 MILES 30 MILES

TOTAL HOUSEHOLDS 14 1,000 18,220

# OF PERSONS PER HH 2.6 2.5 2.9

AVERAGE HH INCOME $59,630 $59,072 $62,101

AVERAGE HOUSE VALUE $101,913 $123,661


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OFFERING MEMORANDUM Desert Oasis RV Park · KW COMMERCIAL 4518 Everhart Road, Ste 101 Corpus...

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