Fractional Ownership
This investment opportunity has only recently been available in the
Minnesota North Country. An example of this type of investment is
Trapper's Landing on Leech Lake located at Walker, Minnesota. This
development started out as a purchase of a Ma and Pa Resort that had
existed for more than 50 years. The investors purchased the resort
in 2006. Recently, some of the old cabins have been removed and new
modern rental cabins are being built. Investors have the opportunity
to purchase all the cabin or as little as one-fourth of the
ownership. The developers rent out the cabin when it's not being
used by the owner. The return on the investment has been
demonstrated in five prior resorts that are owned by the developers
and the return is very attractive for investors.
Common Interest
Community (CIC)
Investors
can invest in the purchase of the entire parcel of lakeshore along
with an experienced lakeshore developer. These investments are
involved in the purchase of an existing resort or campground. The
property is surveyed to allow for the individual cabin or camp site
to be sold off with a deed. There is an association of owners and
upon all the sites being sold off, the investors walk away with no
further involvement. The land is purchased at a wholesale price and
the individual cabins or camp sites are sold at a retail price.
An investor can also purchase one or more of these cabins and
have them rented out when not being used by the investor.
Lot and Block Development (L&B)
The investment in L&B results in the investor working with an
experienced developer or builder. The lakeshore is divided into
front lots and back lots for lake home to be built. Once the lots
are sold, the investors have no further involvement with the
lakeshore. Depending on the lake or river, the cost for the property
varies. Usually big water demands a bigger investment as these lots
can be sold for much more money.
Resort or Campground Ownership - A
The investment in these lakeshore properties is one of holding the
lakeshore for future development. As the lakes and rivers get
further from large cities, the demand for high priced cabins becomes
less. Many investors buy these businesses and put managers in place
until the market catches up with lakeshore values. Usually, it takes
only a few years for the cheaper lakeshore to be sold off near the
urban areas and buyers start looking for cheaper lakeshore. The
businesses usually have an adequate income so the investors do not
need to feed the investment while they wait. These are very good
investments as the lakeshore is purchased for substantially less
money when the lakeshore is inexpensive.
Resort or Campground Ownership - B
This investment is good for an investor who is looking for a
different way of life. They can own the business and enjoy the
outdoor life and raise their families with the parents and children
working together to make a living. The increase in resort values can
be made by good management. For every ten thousand net increase, the
business is worth another one hundred thousand. This would be using
a Cap Rate of 10%ually, the resort will increase by one or two
hundred thousand each year. When you are ready to sell, you have a
great 401-K for retirement. This type of investment is illustrated
in our listing of a youth camp
near Walker, Minnesota. |
