The Madison Group Arranges a $6,300,000 loan for Texas RV Park Purchase

The Madison Group (TMG), a leading source of RV park financing nationwide, arranged the financing for the $9,750,000 purchase of an RV park in Texas.  The borrower, a repeat client of TMG, was interested in a non-recourse loan. The finalized terms of this loan were 5.6% interest rate, 10-year term, and a 25-year amortization.

This 4-star RV park is in an excellent location with 210 spaces on 23.7 wooded acres.  It has a stable income source from long-term recreational vehicle tenants and has an occupancy rate of 85%.  The park has common amenities including a clubhouse, shuffleboard court, big screen TVs and exercise, laundry and storage facilities.

The borrowing entity for this transaction was a group of 17 investors. This made it particularly challenging to get a non-recourse loan.  Because the borrowing entity needed to have non-recourse to the LLC and not to the individuals, the loan was structured so only three borrowers needed to sign the carve-out provision. This paved the way for the borrowers to bring in additional capital through an investment group. The down payment was derived from a small group of individuals and silent investors.

      “We do a good deal of mobile home park financing, and through our direct lenders we were able to source the debt for this RV park,” said Jeff Meierhofer, TMG’s director of Finance. “I would say it’s an unusual day when an RV park gets a non-recourse loan. We were happy to provide this for a repeat client.”

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including:  multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States.  Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital.  TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group and Meierhofer can be reached at 435-785-8350 or by e-mailing Jeff at Jeff.M@madisongroupfunding.com.

 

Press Release: The Madison Group closes a $3.5M loan for the purchase of a RV Resort in Florida

Transaction Description: The Madison Group, a commercial loan consultant and broker, has provided the financing for the purchase of this well maintained Lakefront RV Resort. The park consists of 220 sites nightly and seasonal RV pads, with 26 long-term rental units. The resort was completely renovated approximately 15 years ago with all new infrastructures to include septic systems and city water lines. Amenities include a pool, laundry facility, playground, mini golf, general store, and restaurant. The Park is located on 16.5 acres with boat docks and ramps and the best bass fishing in the area.

Challenges: The varying income for the park made it difficult for traditional commercial real estate financing and impossible for an SBA loan. Also the park was located in a rural area and had a great deal of income from snowbirds. The park had suffered some lower income 3 years ago from an issue with the lake on the property which is the center point of their property. The new buyers, investment team, felt it had a great deal of upside to the park and is looking for a higher LTV loan to limit their investment in the property.

Solutions: The Madison group was able to source a lender that would provide financing on the rural park. A great deal of effort was spent reviewing the income for the park and analyzing how the future income would facilitate sufficient cash flow to service the debt. The borrowers were able to get a loan for $3,570,000, 75% LTV, with a rate of 5.5% fixed for 5 years. The loan adjusts after year five but is a fully amortizing loan for 30 years. This allows the investment group to review financing in year six but reduces their refinance risk.

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group and Jeff can be reached at 435-785-8350 or by emailing Jeff at Jeff.M@madisongroupfunding.com.

The Madison Group closes a $3.5M loan for the purchase of a RV Resort in Florida

Transaction Description: The Madison Group, a commercial loan consultant and broker, has provided the financing for the purchase of this well maintained Lakefront RV Resort. The park consists of 220 sites nightly and seasonal RV pads, with 26 long-term rental units. The resort was completely renovated approximately 15 years ago with all new infrastructures to include septic systems and city water lines. Amenities include a pool, laundry facility, playground, mini golf, general store, and restaurant. The Park is located on 16.5 acres with boat docks and ramps and the best bass fishing in the area.

Challenges: The varying income for the park made it difficult for traditional commercial real estate financing and impossible for an SBA loan. Also the park was located in a rural area and had a great deal of income from snowbirds. The park had suffered some lower income 3 years ago from an issue with the lake on the property which is the center point of their property. The new buyers, investment team, felt it had a great deal of upside to the park and is looking for a higher LTV loan to limit their investment in the property.

Solutions: The Madison group was able to source a lender that would provide financing on the rural park. A great deal of effort was spent reviewing the income for the park and analyzing how the future income would facilitate sufficient cash flow to service the debt. The borrowers were able to get a loan for $3,570,000, 75% LTV, with a rate of 5.5% fixed for 5 years. The loan adjusts after year five but is a fully amortizing loan for 30 years. This allows the investment group to review financing in year six but reduces their refinance risk.

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group and Jeff can be reached at 435-785-8350 or by emailing Jeff at Jeff.M@madisongroupfunding.com.

The Madison Group Arranges $910,000 Refinance Loan for a Mobile Home Park in CA

The Madison Group (TMG), a leading source of mobile home and RV park financing nationwide, arranged the $910,000 refinance of a Vintage RV Park in Borrego Springs CA. The client purchased the park one year ago, and wanted to restructure the loan from a quarterly adjustable into a longer fixed rate term. TMG secured the financing with a 15 year fixed term with a rate of 4.90% and a 30 year amortization at 65% LTV. The loan has no prepayment penalty.

This unique 77 pad RV park has an eclectic mix of vintage RVs is always fully occupied by tenants and has a long waiting list. The tenant mixe is 50% weekenders, 40% snowbirds, and 10% full time residents. Most of the leases are month to month. Borrego Springs is a small market with a population of 3500 residents.

TMG overcame several challenge of finding a lender that was willing to finance an RV Park in a rural community. The tenants are not typical for an RV park with very few full time tenants. The property performs more like a mobile home park for snowbirds than an actual RV park, which affects the type of financing that can be acquired.

“We found a credit union that liked the property and the operator. They offered him the opportunity to refinance his debt into a longer term fixed note and a 30 year amortization. No prepayment penalty on the loan and the increased cash flow will help with ability to purchase another park next year. He no longer has his properties tied up with cross collateralization which gives him more financial freedom” said Angela Kesselman, Associate Director of Finance.
A happy client commented: “I purchased an RV park just over a year ago and I had a terrible SBA loan that required liens on other properties and businesses. I’m not sure how I came across The Madison Group, but from the time I spoke with Angela on the phone the process was a seamless. Once Angela knew the loan would go through, she handed me over to her loan coordinator, Brandi. Now let me tell you, I’ve purchased or refinanced over 10 properties in the last 10 years and I’ve NEVER dealt with a loan coordinator with so much common sense and amazing communication. I plan on buying another RV park this year and hopefully the Madison Group can help me again. I would definitively recommend them to anyone looking for funding.”
The financing was arranged by Angela Kesselman at The Madison Group.
The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.
The Madison Group can be reached at 435-785-8350 or by emailing Angela at angela@madisongroupfunding.com.
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How Our Email System Got Hacked

Recently, one of our employees received an email from a valued client.  The email said that important information was attached and to open the attached weblink to retrieve it.  The employee opened the weblink and found a Google sign in page.  The employee was asked to sign into their Google account to get the promised information.  The employee did.  Next, a message stated that there was a problem and the link couldn’t be opened at this time.

Two days later, my banker called me to confirm whether I wanted to wire $47,550 to an account in Baltimore for the purchase of a manufactured home.  My banker was confirming an email request from what she thought was my office to do just that.  We had sent no such email request.  And we stopped the wire transfer from happening.

In retrospect, here’s what happened.  Our client’s email system was hacked.  The thief was then able to replicate our client’s email and send an email to us that looked like it was from our client.  When our employee went to open the link and complete the Google page, they were actually entering their Google password into the thief’s Google look- a-like page.  With this information, the thief was able to open our employee’s email account and see who they talked to and what subjects they addressed.  Thereafter, the thief emailed the bank employee, who we regularly communicated with, and asked for the wire transfer using names and phrases we often use.   The thief specifically asked our banker not to follow up with a confirmation call as we were busy and out of the office.  The thief’s email to our banker looked just like it had come from us.

One thing we’d done right was to have previously visited with our bank about wire transfer safeguards.  We’d asked the bank to confirm by phone any wire transfer requests.  In addition, we invested in a “Cyber Liability Insurance Policy” two years ago that would have helped had this situation gotten worse.  This policy protects us from private data loss, system damage due to hackers, liability caused due to hackers, copyright infringement, etc.

 

To reduce our future risk, we’ve:

1)      Trained our employees not to open weblinks in an email purporting to have documents accessible in it and to only open attached files ending in .jpg or .pdf ;

2)      Begun to review our online bank transactions daily for unapproved activity;

3)      Trained our employees to never update or authenticate account information pursuant to an email request;

4)      Advised our bank that all wire transfers must be requested in person;

5)      Decided to use public wifi systems sparingly, and never access sensitive information over them.  Employees with unlimited mobile data plans will use them exclusively; and

6)      Adopted a new email protocol which requires two passwords if previously unauthorized locations or devices try to access the system.

 

Stay on your toes.  The Barbarians are at your internet portal.

 

By Kurt D. Kelley, J.D.

President, Mobile Insurance

Best Keep Secret in Arkansas

Best Kept Secret: Motor Home Parks in Arkansas

Arkansas is a great state to drive though, and has a distinctive “laid back” attitude that might fit you, especially after experiencing the full power of neighboring states like Texas and Louisiana.  First, Arkansas offers plenty in the way of tourist attractions.  There are wilderness grounds, mining for diamond, hiking and camping activities and cavern tours.  Continue reading