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Anyone w Experience buying Marinas?

Discussion in 'General Yachting Discussion' started by Danvilletim, Feb 1, 2019.

  1. Danvilletim

    Danvilletim Senior Member

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    we are starting to look at a couple marina and Drystack opportunities in North Carolina. Both around 200 slips/ racks.

    Has anyone had experience in buying / investing in similar? Would love to hear some good horror stories to convince me it’s a bad idea. PM me if you are willing to share your exp.
  2. olderboater

    olderboater Senior Member

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    I have experience in not buying them. I've evaluated many over time and considered some before my wife and I would each time come to our senses. However, our primary reason to never buy was we don't want to mix any business into our boating, just have chosen to buy nothing in the marine industry.
  3. Capt J

    Capt J Senior Member

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    If the price is right, yes. I was assistant dockmaster to a 50 slip marina in South Florida in the early 2000s, it had around a 6 story hotel as well as some office space that was rented...…….we sold a lot of fuel, but the marina netted a lot more than both the hotel/restaurant/and office building did, combined.
  4. menkes

    menkes Member

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    An old wise seaman told me once "Never turn a hobby into an occupation"
    In my opinion there is nothing to be added
    olderboater is absolutely right !!!
  5. Beau

    Beau Senior Member

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    If you are on the operations side be ready for ALL the headaches. Backroom/investor is a different story - if you have the right operational team.
  6. RER

    RER Senior Member

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    This cannot be overstated. The dynamic can and probably will change 180 degrees when you bring business into your boating life vs boating as a leisure time escape from, and not connected to business. I've been on both sides and the difference is vast. Truth be told, for me it's just not as enjoyable.
  7. chesapeake46

    chesapeake46 Senior Member

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    Q: How do you get to a million dollars owning a marina ?
    A: Start with 3 million.....................
  8. olderboater

    olderboater Senior Member

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    More and more there are larger companies owning multiple facilities. However, let's keep in mind some histories even of them. I'll point our Safe Harbor. They claim to be the largest marina owner and operator in the world. They now own around 80. However, let's not overlook their predecessor company, Marinas International, which went into bankruptcy and then the same basic group of people purchased the marinas from the bankruptcy.
  9. RER

    RER Senior Member

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    With the exception of small backwater operations, over the past 30 years marina ownership has followed the same path as car dealerships. From individual owner operators to corporate group ownership. A better business model to handle the new debt load to acquire a business that was in many cases built from nothing by the prior owner. A lot of older marinas were cash cows for the original owners as the rise in slip rates over time far outpaced the base/development cost. Then, when sold for big bucks the debt service takes the profit away. Starts the clock over. Some can't get past that.
    Last edited: Feb 2, 2019
  10. olderboater

    olderboater Senior Member

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    I question some of the current groups and their ability to handle any negative turn with their debt loads. At least one is banking on going public before that time hits and getting an infusion of cash through and IPO.
  11. Beau

    Beau Senior Member

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    I would recommend that we don't mix conglomerate ownership with single facility operations. Costs of one are covered by depreciation, debt charges, capital allocations and other "booked" tax efficiencies (speak with your accountant). Conglomerates are not operational guys , they are investors and their portfolio size and diversity are not zero sum, but greater than the whole. Bankruptcy in a down turn if the property doesn't appreciate, or else a re-fi happens - they have too much debt for the lender to just foreclose. And that debt has been sold 3 times already outside the country. If you're an unsecured investor, say a "priority" share holder with that lovely dividend , well you're broke when the reorganization occurs, but the principals ain't. They have pulled their investment amounts as soon as the UCC's were filed with no personal quarantees

    It is, IMO, the single yard operator that has to be wary, and I think that was the OP's intended question. If you're properly capitalized and purchased reasonably, why can't that be a success. Somebody mentioned Safe Harbor who recently added Jack Brewers operation to its portfolio. (BTW, Safe Harbor is diversified in many directions included non water front real estate development - watch for waterfront condos) JB built his company from a site in Mamaroneck behind a hardware store, and he and his bookkeeper, so I'm told, would visit all his sites and do his bookkeeping from the "back of his car" He stayed on top of his business, made certain that he had top managers at his sites, and did not drive leased Porsches - I would hope that he and his family are well provided for now on that side. IMO, JB sold just as many of his marinas were coming due for upgrades, and Safe Harbor has "upgrading" existing facilities as part of it business model.

    Marina ownership is just another business. It's not mysterious, nor more complicated than any other business. Many of the second generation Mom and Pop's pull too much cash from their businesses....because there is too much cash. When every customer asks you what your "cash" price is, that's not a good business model. Control expenses and be realistic on the draw side, and I think you can succeed. If you are going to 'roam " the seas on your private vessel during peak season, expect to reduce your draw by the mangers salary. If you want to make $500K a year, become that diesel tech - just kidding.

    I gotta learn how to snow ski - Saturday night at 11 pm, and I'm on the "wrong" kinda forum....
    Last edited: Feb 2, 2019
  12. AnotherKen

    AnotherKen New Member

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    I recall discussion with a marina owner who told me that security is the biggest issue. You would have to have a person working there all day to keep thieves away. Yachts and sailboats attract thieves and people who think it's ok to board boats and explore them. The most successful marinas have gates and fences or walls to keep non-owners away from the docks and piers.

    It's helpful to have people who live on their boats in the marina because they are helpful with security. To help them you could provide electricity and fresh water and the ability to pump out their sewage tanks and transport it to a place that can process it. It's also helpful to make sure that the operator knows how to help boat owners connect with contractors who can help with repairs and maintenance.

    Besides that, it helps to keep the marina looking good to attract new customers.
  13. olderboater

    olderboater Senior Member

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    Then have that person. Fence and gates or security guard or any number of ways to provide security. It's an issue for every business I know of. Have to keep an eye on the water too. Back door in addition to front.
  14. Beau

    Beau Senior Member

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    That might also be a consideration in your purchase choice - is it a repetitive crime zone?
  15. olderboater

    olderboater Senior Member

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    Good advice to Tim to consider, but I've seen thefts from marinas located in the finest areas, at luxury resorts, you name it. Crime doesn't confine itself to zones even though some do have more than others. If you don't secure one, then you will have theft.
  16. Capt Ralph

    Capt Ralph Senior Member

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    Looking back at my fathers marina, stuff disappeared out of every crack in the boards, gap in the fence and lined empty employees pockets.
    His greatest relief was selling off and not having to consider everybody a lying thief, even though most were.

    One of my worst decisions was coming back from retirement a few years back and working on boats full time. I have lost more money and traveled less on our boat.
    Gravity has won my last personal round (back problems) and I have retired again.
    Maybe now I can travel some and visit my father more.

    If you have money to burn, unload, throw away- Luv regulations up the tail feathers- Want to work all hours- will loose trust in your fellow man (should not be there anyway)- See less of your family- Force yourself to smile back at lying customers; then buy into a marine service center; Dock/Marina- Service Center- Retail store..

    Odds are you will Baker Act yourself with 12 months.

    Don't spend your money there, come up here and by me a cup of coffee if you have to throw your money around.
    Last edited: Feb 4, 2019
  17. olderboater

    olderboater Senior Member

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    Glad to see you're retiring for real this time. Now go enjoy yourself.
  18. Capt Ralph

    Capt Ralph Senior Member

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    Getting a late start.
    Another kidney stone decided to drop this last week. I don't pass the planetoids well.
    CT tomorrow morning, then they (doctors) go fishing.
    Next few weeks dragging stuff out of the shop into the middle of the parking lot.
    If it's still there the next morning, into the dumpster it goes.
  19. olderboater

    olderboater Senior Member

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    Will they blast it, hoping to break it into small pieces you can pass?
  20. Oscarvan

    Oscarvan Senior Member

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    If you have to ask.... the answer is no. It's a finicky (and not "just another") business like many others and if you don't have a lot of experience you are at great risk. You need to KNOW the numbers.

    Case in point I want to make is that 10 years ago I bought a boat to dock on the Chesapeake and was told by a LOT of marinas that they had a waiting list. Today those same marinas are offering me a "first month free" if I sign up TODAY. Vacancy is in excess of 40% in some. That's BIG slide. The business is in decline. Some numbers may not show it. Total sales are good, but it appears there's a lot of consolidation into the high end. Middle class peeps aren't buying too much. The next generation doesn't want to own anything. The numbers are decreasing. Owning a startup in that environment would be challenging.

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