Simply Marinas has financed marinas as a private lender or with their traditional financing network.
Beyond the cap rate, the seller’s ability to finance a marina is more important than ever. To a lender, the debt coverage is more important than the cap rate to see if NOI can cover the loan. While it is difficult to generalize, it appears that those owners who are able to cover their debt are keeping their marinas, for the most part. Those who are not able to pay their debt want to sell and cut their losses. Today’s financing market is ever-changing, and it is now changing for the better, as far as marina buyers and sellers are concerned. The financial market is showing signs of stabilization, loosening pent-up investment capital for notable projects. Although the availability of financing is not as readily available, there are real estate investment funds available for transactions involving marinas. there are not a lot of lenders out there, but they are out there. There are banks that are lending and even the Small Business Administration is participating. Lenders are willing to spread the risk if they are familiar with marinas and the quality of the marina itself.
Private lenders will look at solid financial statements and capitalization rates that in some cases are higher than other real estate assets. Marina and boatyard owners must be willing to negotiate with current lenders to reduce the debt, where applicable, to help that buyer acquire the marina.
What about owner-financing? This is a simple case: either the owner can do it or he can’t. On the other hand, those marinas that can provide owner financing are at a real advantage, understanding that they will get little upfront but ultimately, be paid over time while making it easy to sell the marina, which is draining current cash reserves.