Buying a marina

[brad9798]

Okay, here we go. I am seriously researching a major life change- buying a marina. I've checked into 'building' one--too much red-tape.

I have successfully owned a lot of real estate, and currently have my own marketing firm (that I will sell if I pull the trigger). But, my entreprenurial spirit is rising ... again.

I guess I am just looking for a sounding board and/or reasons to or not to buy.

Currently looking at locations from Maryland down through Hilton Head, SC. And possibly the west coast of Florida, as well.

I love running a business and running my boat- why not combine the two? The family (wife/kids) think it would be a perfect fit for our lifestyle. I have grown up around marina operations, so am at least somewhat familiar with how they run and some of the pitfalls, etc.

Do any of you have any experience with this? I am not looking at buying some huge resort/marina complex. BUT, I am not looking for some 2nd class dump either. I want a nice marina from 50-150 slips, with REAL boaters-not just tourists, rack storage, parts/service, possible brokerage, restaurant, etc. in a NICE setting with room for expansion.

Any thoughts, insight, pointers, or whatever would be appreciated ...

[Ian McColgin]

This might be a great time to get started for some odd reasons. Most small businesses loose money the first few years anyway, so doing it now in the face of an economy looking to tank may be just the way to position yourself for a turn around in a couple of years.

G'luck.

[PatCassidy]

Make sure you don't put the cart before the horse. Know your csutomer and what he wants. My main gripe about my marina, which is owned by the city of Long Beach, is that they don't care what the boaters are looking for.

How nice will the boater restrooms and showers be?

Will your marina cater to power boats or sailboats?

What size?

How close to the nearest chandlery?

What is your policy on live-aboards?

How will you keep deadbeats, drugs, drunks and/or old floating wrecks out of the marina?

Will you allow houseboats? What if they obstruct other people's views?

How big will the dock boxes be? What about additional storage facilites?

Do people pay for their own electricity?

Can people sublet their slips?

Do people want a yacht club or a restaurant? Or do they just want a convenience store nearby?

Will people allowed to work on their boats in their slips?

What kind of marina security will there be?

What is the marina excess capacity within an hour's drive and who do they cater to?

Will you allow wood boats?

How convenient are the pump-out facilities?

What about price?

[Donn]

Owning and operating a marina is just a business. Write a business plan, and see if you can honestly make the numbers work.

Now is a great time to buy real estate...interest rates are not apt to be this low for a long time, and most on-the-water real estate is appreciating.

PS..here's a site that lists marinas for sale:

Marinas for Sale

[ 11-06-2002, 01:36 PM: Message edited by: LOON ]

[On Vacation]

Be careful what you wish for.

http://www.spoonerscreek.com/
Check out the photo album.
This is the head of the creek inside the protected harbor.

[Michael]

Seriously look at the federal and/or state environmental regulations as part of your due diligence. Also, be careful that you are not unwittingly buying someone else's cleanup job.

[brad9798]

Keep those replies coming!

Pat Cassidy- good questions!

Donn- that was a site I have used in my research! Foley real estate is another good one!

Wood boats? What kind of hypocrit would I be if I said no!

Thanks again.

Brad

[Paul Denison]

Restaurants have driven many a man to the poor house!

[Donn]

Alot of marinas job out restaurants, bars, boat and engine repair, etc.. The more you rent out without increasing your investment, the better. You'll be renting slips and slots on storage racks...why not rent out the retail and service operations as well? It sure beats maintaining payrolls.

[ 11-06-2002, 05:29 PM: Message edited by: LOON ]

[rodcross]

Loon, its called outsourcing. You were never 'outsourced' were you? Or, were you?

Don't forget. If I'm the only person on the planet that matters, what do you matter?

edited part: That was too strong. Donn was coming from a position of wanting to help figure out a way for Brad to afford a marina.
I think Brad's nuts because running a marina is boring and every marina owner I've met is so stressed out-5 irate phone calls a day-insurance-'How am I going to protect Rod's precious spruce masts through the winter? He says it takes 9 people to carry it and it has to be be protected from the sun...I have three employees...he'll probably sue me...'

Brad, It takes a special person to create a community. That's what you'll need. You might be able to do it, but I think you're asking for trouble.

Do you have another dream?

[ 11-06-2002, 06:58 PM: Message edited by: rodcross ]

[Donn]

I was an outsourcer, not an outsourcee. I rented sale book tables in bookstores, and paid the bookstore owner a % of sales from those tables. It paid them better than running their own sale tables, and I didn't have to "buy the store."

On second thought, I guess I was an insourcer. The bookstore owner was the outsourcer. If the bookstore owner canned an employee because of his outsourcing of my insourcing, that ex-employee would be an outsourcee.

[ 11-06-2002, 06:53 PM: Message edited by: LOON ]

[Chris Coose]

Most guys I know stop playing on the water once they begin working on it.

[PatCassidy]

A sailboat neighbor of mine bought a 42 ft. cabin cruiser with a 14 ft beam. When he went got it to his new slip he learned with great dismay that the boat was too wide for the slip - or any any other comparable slip in the marina! He and his wife had no choice but to move from what had been their home of seven years.

Make sure your slips are wide enough to accomodate your target market.

[Rosebud]

A career change towards the water must be a good one. Best of luck to you!

We've worked in a few boatyards and marinas. They are all different and have different business strategies. But it seems that a safe way to go is to view your slip rentals as "paying the mortgage" and the services you sell will pay the profit. Anyway, basically people like a marina because they are treated well. You can't always choose who comes in to tie up, but you can treat everyone well.

Wooden boat people are especially responsive to being treated with respect ... AND they have a big "Word Of Mouth" effect. Cater to them and you'll do well.

Rose and Bud

[whb]

Brad

In a former life I was in the Receivership business. ie I worked for the Receiver that a court would appoint when someone went belly up.

Many of the files were Restaurants. The only rule of thumb that I have ever come to believe for Restaurants is that if you grow up in the business you have a chance. Other people just don't know what kind of commitment it takes to run a restaurant. Working from before dawn to well after dark.

I suspect a marina is similar. You say you grew up around them so you may have the same early understanding that it takes to make a success.

Have you considered managing someone else's marina before you sink (I guess sink is a bad word on a boat forum) your own assets into one.

Just a thought.

Good Luck

Howard

[Wiley Baggins]

Brad,

I would just reiterate what Michael said regarding any potential environmental liabilities. It sounds, from your initial post, that you are aware of the environmental regulations affecting new activities, but it is the legacy stuff that kills you.

[Cap'n R an R]

I have a suspicion that there is a lawyer lurking on this site that would very much like to join your venture as a partner,investor,lawyer,varnisher or whatever...

Cap'n Ron

[Concordia..41]

A lot of the Marinas on the East Coast of Florida are being sold for Condo development. Water front property is no longer affordable for just a Marina. Slip rentals have more than doubled in our area in the last three years. The one marina in the area that has held its prices has a two year waiting list for a slip and about 9 months for a haul out.
There were two marinas in town where you could do your own work when hauled out. The larger one was owned by a large corporation and required you buy all your supplies from them. The other was owned by a private individual and you could buy your supplies any where but there prices were competitive with local marine supply stores. The smaller marina was more boater friendly and kept the prices affordable at both Marinas.
The smaller marina was up for sale and we looked at buying it. After running the numbers, with the Marina at full capacity it would not cover the mortgage, taxes and insurance.
It was sold to a person that is on the board of directors of the company that owns the larger marina. They have made vast improvements in the marina. They got a permit to fill in wetlands to gain more space; they built a large new building for working on boats, had power lines moved, new and bigger travel lift and soon new docks. Needless to say the prices went up at both marinas.
They are both now operating at minimum capacity, have lots of empty dock space and do not get the transit business they used to have from northern vessel going south in the winter and north in the summer. They both are also know as no longer boater friendly by the boaters traversing the ICW.
Members of a large corporation own both marinas and they must be using them as a tax loss.
Most locals are going North to Jacksonville, Green Cove Springs and Fernandina or South to Daytona for cheaper haul out rates and more boater friendly Marinas.

Dave

[Matt J.]

Hye Cap'n Ron,
I have a sneaking suspicion myself there may be an engineer as well.

Brad,
Born and raised in Maryland. Lived on western shore, live on the eastern shore. If ou would like, bring the family out for a tour of the area. there's everything from Mom and Pop marinas (best if you like people) and then there's the commercial resort types (best if it's just $$), and then there's those in between (nice compromise). Not to mention there's a nice marina, not real flashy, that is a condominium marina - buy the land, sell the slips as condos...

Don't konw how familiar you are w/ Maryland, but J-n-me could show you all around. That bay creates lotsa marinas and a demand for it.

Matt

[brad9798]

Matt- I may just take you up on that after the first of the year ... when it's time to kick the tires ... I mean docks.

I am NOT just interested in $$, but I have to have a certain amount to maintain my lifestyle ... so one of the 'compromise' marinas is what it will probably.

I won't be just taking profit from the marina, my salary will become part of the costs.

-------------------------
I am not interested in a resort setting.

I understand it is 24/7 in nature.

I have discussed this extensively with my marina (I'd buy it if they didn't want FIVE times gross ...)

I would outsource EVERYTHING possible through leases to parts/supplies, broker, service, etc.

Definitely wooden boat friendly ... duh!

I have built two other successful businesses, sold one, and am currently running/working everyday in the other. Both were/are HEAVILY people/relationship businesses, so I am comfortable with my skills there.

I TRULY appreciate the insight (pos. and neg.) thus far.

I've got numbers coming to me from about 4-5 marinas in the Carolinas right now ... including tax returns, envrironmental studies, tax/insurance info. etc., etc.
---------------

More to come on this one ...

Thanks again,

Brad

[ 11-07-2002, 11:02 AM: Message edited by: brad9798 ]

[Ken Hall]

I've often wondered whether there would be synergies in having a marina and a bed-and-breakfast. The B&B might attract lubbers who like to watch boats come and go...some yaaaties might want to sleep on land in a bed once in a while (and even if not, you could maybe sell 'em breakfast). Maybe tack on a repair/restoration yard, or even building and selling dinks to the yaaaaties. Just throwing stuff at the wall to see what sticks....

[John Bell]

Seems to me that if you can operate a marina as essentially a break even proposition for a few years (with just enough profit to maintain your lifestyle) it's still potentially a good investment. If you choose locations wisely, the appreciating value of the waterfront real-estate is going to reap some pretty good returns when it's time to move on or retire.

Sounds like fun to me, as long as you've got enough capital to climb aboard. Lack of cash on hand has been the problem with all my business ideas.

[Alan D. Hyde]

Brad, I'd find an out-of-the-way place where costs are low, where you'll become a welcome asset to the community, where regulatory problems are likely to be less pressing, and where you can cater more to cruising people than to the weekend GRP unwashed.

There's a magazine article somewhere a few years back on how John Caldwell and his family did this.

I know several likely islands, but since I've given some thought to this myself, you'll have to find your own. Good luck!

Alan

[boatlifter2]

http://adventurebaymarina.com/

This property is tva permitted. Some partners and I were going to add condos, lake homes and the marina. It truly is a diamond waiting to be discovered. The reason we havent already done anything is because another partner in some big property went belly up as they say, so my attention is elsewhere. If you get a chance check it out.

I really wish all our other property would sell and we could keep this, theres a peace about being there.

[Woxbox]

What's the long-term outlook for boating and the marina traffic it generates? I've seen numerous indications that boating activity, like all outdoor activity, is on the decline as the baby-boomers get too old to leave the house and the younger set have their eyes glued to computer screens. I know fishing is on the decline, golf courses are starting to hurt, and participation in sail racing is not what it used to be.

If a marina lends itself to conversion to prime waterfront for other business purposes some years ahead, I can see the investment. But as a business itself, I wonder if growth can be expected.

[Reynard38]

The fewer employees you have the better. Keep it simple. Lease out the Resturaunt, chandlery etc.
I would imagine a marina would have less than 50 full time employees, but I heard according to new IRS regulations 2 part timers count a 1 full timer.
And keep the bathrooms spotless! That's want impressed my wife most about our marina.

[Chip Chester]

The folks local to you that want 5x gross...
Assumptions: your current marina is in the St. Louis area, free from hurricanes (but not tornados).
Consider this approach: Keep your business for now. Buy marina with a contract to retain current owners as employees for two years or so. During that time, learn, do your outsourcing arrangements, development, condo-ization, etc. Pocket the insurance savings from not being on the coast. In a few years, if it's going well, sell the marketing biz with a few year's consulting income built-in. So a 6-year gradual transition.

Drought conditions could have almost the same effect as hurricanes, though...

[boatlifter2]

There has been an economic analysis done on the property, its listed on the site. In our area it seems the marinas are growing, not downsizing. We have added on and made inprovements to several marinas here in Tennessee. But this property could be used for single family homes with private marina also. I personally would love to build a home on it and keep it all to myself.

[Mike Vogdes]

You guy's do realize you are commenting on a ten year old thread....
You need to have your head examined if you want to buy a marina in this economy.

[boatlifter2]

LOL yeah I know its 10+ years old. But it is still possible so why not. lol

[StevenBauer]

I'm pretty sure Brad never bought a marina. Seriously.



Steven

[Phil Y]

Why not? I think the forum rules prohibit "for sale" ads. Maybe get out of marinas and go for used cars.

[bamamick]

If you do buy one, see if you can find one with room for dry storage. I am amazed at the rates marinas charge for allowing you to keep your boat and trailer on their property, which doesn't take much work at all on their part.

Mickey Lake

[Larks]

Here's a thread that just goes to prove that it's worth having a bit of a read through the responses to it before commenting......

[Peter Gottlund]

But Larks, I'm laughing so hard, I just have to comment .....

[Woxbox]

Doh!

[Breakaway]

I am amazed at the rates marinas charge for allowing you to keep your boat and trailer on their property, which doesn't take much work at all on their part.

I hear you, Mr Lake. But consider that if that marina owner decided to call a developer and build condos, he might not have to ever again do any work at all.

Kevin

[SMARTINSEN]

Seriously.

LOL

[CJ]

If you love running your boat, keep it at another marina!

Otherwise, how many times do you plan to live? Just do it.

[peb]

A business broker once told me marinas are the easiest type of business to list and attract interest, but difficult to sale. Lots of folks lolling to buy a business think a marina would be fun, and the more due diligence they do, the less they want one. Lots of hidden risks.

A well run marina is surprisingly stable during periods of economic downturn. But make sure you understand the particular state's laws dealing with taking possession of an abandoned boat. Any hidden environmental problems are important to uncover. Along those lines, make sure you know exactly why it is being sold. Be wary of a marina that is run down and needs work, lots of businesses are good buys if they need to be "restored", maybe a marina is not, IMO.

[Nicholas Scheuer]

RYC friends did that a few years, now running a marina on Mobile Bay. They are managers, the owner is a friend of theirs. His former employment was IT Magager for a local hospital here in Illinois. I could put you in touch, if mutually agreeable.

[Breakaway]

I was in the marina business as a general manager-20 years ago. There's one around here for sale; 30 slips, lift, several buildings and shops, storage racks, and two residences on 8 acres of creekfront. Fiberglass production boat dealership. Also build and sell their own fiberglass boats. Also build, maintain and restore a fair amount pf wood boats. 4.5 mil.
Carrying that mortgage would be about 20K per month. So, guesstimate the cost of taxes, a few employees, utilities, and other overhead. Then think about how many bottoms that is to paint, engines to repair,planks to replace, boats to sell etc.

Hard to eke a living, in my view, unless you have all or most of the cash up front and then count on the property rising in value for the long term gain.

Kevin

[Oysterhouse]

“When you make your hobby into your livelihood--you lose your hobby”

Andy Wiley, 90yrs, longtime owner of Irvington Marina, Irvington Va. Commenting on the “joys” of owning a Marina.

I later bought a “mini marina”------He was right.