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Old 07-25-2021, 06:13 PM   #1
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Explain buying an rv lot on a long term lease...

Watching Andrew Steele, heís advertising $750,000 riverside lots in Colorado... being sold on a 40 year lease...

Explain that to me... you pay a fortune, upfront, on what is basically a 40 year prepaid rental...

I absolutely get the upside to the seller...

To the buyer, not so much...
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Old 07-25-2021, 07:32 PM   #2
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The $750,000 is what you pay to use the lot for 40 years. He gets $750,000 and you get to use the lot for 40 years. Simple, but not for everyone.
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Old 07-25-2021, 07:36 PM   #3
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Who pays the taxes? Can you sublet?
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Old 07-25-2021, 07:52 PM   #4
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Who pays the taxes? Can you sublet?
Depends on how your contract is negotiated
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Old 07-26-2021, 05:18 AM   #5
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The $750,000 is what you pay to use the lot for 40 years. He gets $750,000 and you get to use the lot for 40 years. Simple, but not for everyone.
Thatís the worlds worst investment. Why would you lease an appreciating asset???

With the time value of money that 750k is likely 10 million after 40 years...
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Old 07-26-2021, 05:53 AM   #6
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I don't see how you get from 'sold' to 'prepaid rental'. You've bought it, it's yours, just like any other property. You can sell it any time you like, and if property values go up over time, as they generally do, then you've made some money.
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Old 07-26-2021, 06:20 AM   #7
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I don't see how you get from 'sold' to 'prepaid rental'. You've bought it, it's yours, just like any other property. You can sell it any time you like, and if property values go up over time, as they generally do, then you've made some money.
Not really. Its a 40 year lease, property reverts back to the developer in 40 years...

The closer you get to the end of the lease, the more worthless the property becomes...

How much would someone pay to "buy" the property with 2-3 years remaining on the lease? Very, very, little.

Its a game of chicken, played over 40 years...

You almost never see deals structured like this, which is what makes it so odd!

Kind of like buying a house and 30 years later handing it back to the bank...
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Old 07-26-2021, 06:25 AM   #8
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...wondered why the owner stressed there were no HOA's at Mountainview. Yeah, it's a terrible deal.
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Old 07-26-2021, 06:29 AM   #9
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...wondered why the owner stressed there were no HOA's at Mountainview. Yeah, it's a terrible deal.
How did he get 3-4 people already to pony up and buy lots? Unless those are straw buyers designed to establish a "price" for the rest of the lots.

I have to believe that folks who can afford a 2 million dollar RV have enough knowledge to spot a bad deal, or at least accountants and advisors that can...

Is there any hidden upside in this deal to a buyer?

If you buy a mini-mall under the same terms at least its immediately deductible against income with favorable tax terms, like leasing a car. But for an RV lot?
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Old 07-26-2021, 06:30 AM   #10
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So then the word 'sold' isn't accurate. In which case I agree, crappy deal - unless someone would have otherwise spent 1.5 million or so camping there...
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Old 07-26-2021, 06:43 AM   #11
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Long term lease might be a way around some local zoning restriction and/or a way to maintain more control of the park. I don't think I would go for the lease, but we do own a lot in two different motor coach resorts. There have been a lot of people buying and the prices are rising. We travel several months each year, but its nice to know that we always have a place waiting for us whenever we want or need it.
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Old 07-26-2021, 07:03 AM   #12
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There is an old saying: "A fool and his money are soon parted". If this deal is as described, and I have no reason to believe it's not, I think this saying applies. If there is a bargain purchase at the end of the deal maybe not so much. In any case $750,000 is a lot of money to pay for a parking spot, even with amenities. I'm thinking for that kind of money you could buy a lot of property many places in the country. Even if I had that amount of money I don't think I'd spend it like that.
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Old 07-26-2021, 07:06 AM   #13
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It doesn't seem like much of a bargain. I paid less than half that amount for a large lot in Lake Havasu City. Plus, it came with a 2600 sq ft home, swimming pool, and 50 amp hookups.
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Old 07-26-2021, 09:54 AM   #14
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I looked through some of the documents on the website and here's what I discovered.


The leasee is responsible for all taxes, both on the land and any buildings/structures that he wishes to add to his lot.


Any buildings or structural improvements on the lot are on the leasee's dime.


The leasee pays a yearly fee for the electrical connection to his lot, pays a monthly fee to the regional electric company that provides the electricity, and the charges for actual kw usage.


The leasee may RELEASE his lot at at any time but if he does so himself or uses an outside broker, he will be charged a transfer fee of $2K if the price is under $100K, or 3% of price if over that amount.


I cannot imagine the benefit of anyone leasing and developing property there, but that's just me.
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