Tom & Coleen Enmon (985) ext. 111 Office (985) Cell

Transcription

1 Cherokee Mountain Cabins are located in western North Carolina nestled in Nantahala Na onal Forest which comprises 90% of the land in Macon County. The cabins are set on 34 acres of pris ne creek side property. We are located 2.5 hours north of Atlanta, GA, 2 hours east of Cha anooga, TN, 1.5 hours west of Asheville, NC, and 1.5 hours south of Gatlinburg, TN The Nantahala area has four dis nct seasons with summer highs rarely out of the eigh es and even a few snowy winter nights. The streams, rivers, and lakes are crystal clear. We have many outdoor ac vi es nearby whitewater ra ing, mountain biking, horseback riding and hiking the Appalachian Trail to name a few. A er spending over twelve years building and managing twelve rental cabins, we have made a few discoveries of our own. Our monthly income per cabin exceeds $5,000. We found not only could we enjoy our cabin when we chose, we could also generate enough income to help pay for itself by ren ng it to our great guests. We purchased 31 acres adjacent to the original 34 acres. We call the development The Village at Cherokee Mountain. Fi een home sites were carefully laid out in 1 to 3.6 acre sites. We created unique home sites that not only included rushing creek side but also mountain top views. Ten sites have been sold as of December Eight of the home sites have completed log cabins that the owners now enjoy. And two more cabins are under construc on this year. On home site fi een we built the Sanctuary, a custom built, 1.4 million dollar log home that is also income producing. We would like the opportunity to show you how to build a luxury mountain cabin and have someone else help you pay for it through our rental program. The home site map and pricing are included for your review. I have included an Average Monthly Rental Income for each cabin. A er years of experience we can show you how this is accomplished. It cost approximately $ per square foot for real log construc on. We can suggest log companies, builders, permit process and financing. I have also included three different prospectuses: $60,000, $70,000 and $80,000 per year rental income. All of our cabins have met or exceeded these projec ons, using five years of rental income history. We would be happy to give you a tour of our wonderful home sites if you would like and also included is our Management Agreement. We designed this agreement so the investment could be the most hands off rental property you have ever owned. Tom & Coleen Enmon (985) ext. 111 Office (985) Cell tenmon@janikinggcr.com

2 Cabin Monthly Average 2017 Hideaway, 1BR $ 41,368 $ 38,100 $ 55,920 $ 60,772 $ 58,847 $ 4,909 Cherokee Lodge, 2BR $ 55,560 $ 51,176 $ 62,468 $ 69,232 $ 60,903 $ 5,075 Water's Edge, 3BR $ 49,768 $ 55,313 $ 71,606 $ 80,899 $ 84,342 $ 7,028 Slippery Rock, 3BR $ 59,267 $ 61,688 $ 73,277 $ 76,955 $ 72,975 $ 6,066 Sanctuary, Sleeps 6 $ 75,419 $ 75,800 $ 85,792 $ 88,867 $ 105,416 $ 8,782 Creekside, 1BR $ 66,200 $ 58,171 $ 71,697 $ 74,322 $ 76,611 $ 6,384 Bear Tree, 1BR $ 54,193 $ 46,453 $ 61,115 $ 65,148 $ 63,075 $ 5,256 Hawk's Landing, 1BR $ 61,890 $ 59,671 $ 64,448 $ 72,908 $ 78,193 $ 6,516 Treehouse, 1BR $ 73,613 $ 63,556 $ 68,586 $ 72,708 $ 78,255 $ 6,521 Between the Falls, 1BR $ 73,234 $ 80,010 $ 84,159 $ 84,028 $ 7,002 River Lodge, 3BR $ 59,645 * $ 7,456 Occupancy Totals 57.3% 61.8% 73.6% 74.6% 71.0% * Based upon 8 months of occupancy May-Dec Cabin Available Bookings Percentage Occupancy Hideaway, 1BR % Cherokee Lodge, 2BR % Waters Edge, 3BR % Slippery Rock, 3BR % Sanctuary, 2BR % Creekside, 1BR % Bear Tree, 1BR % Hawk s Landing, 1BR % Treehouse, 1BR % Between the Falls, 1BR % River Lodge, 3BR % As you can see from the number of days booked there is plenty of opportunity to increase rental revenue and lots of open days for you to enjoy your cabin.

3 Monthly rental income will vary depending on the season. January, February, and March are typically slower months. If you will have a monthly note payment, I want you to be aware of how monthly income goes up and down Monthly Rental Income Water s Edge 3BR Treehouse 1BR January $ 1,198 $ 4,936 February $ 3,420 $ 4,262 March $ 5,808 $ 5,989 April $ 6,721 $ 6,090 May $ 6,875 $ 5,980 June $ 7,233 $ 6,707 July $ 11,914 $ 6,691 August $ 7,431 $ 7,326 September $ 8,784 $ 6,772 October $ 10,457 $ 9,200 November $ 6,740 $ 6,286 December $ 7,762 $ 8,015 Go to the prospectus attachment to view the investment and tax advantages of cabin rental ownership. To assist buyers we can offer Owner Financing of 50% of the home site purchase for a two (2) year period at 6% interest only paid annually.

4 Scenario: 20 Year Financing, 50% Management Fee These figures are only estimates and do not represent any earnings claims or guarantees. Approximately 1500 sq ft 3 Bedroom Cabin Income/Management Fee Annual Monthly Estimated Earnings per Cabin $ 60, $ 5, Less: Management Fee $ (30,000.00) $ (2,500.00) Net Income to Cabin Owner $ 30, $ 2, Management Fee includes all bookings/leasing of cabins, preparation of cabin for use, cleaning, hot tub sanitizing, stocking of all linens, bath soap, shampoo, conditioner, toilet tissue, paper towels, trash receptacle liners, hauling trash away from cabins, cutting grass, grading driveways, gutter cleaning and replacing light bulbs. Management Fee does not include Maintenance and Repairs to actual Cabin. Management Fee accounts for most expenses incurred by this investment other than the mortgage payment, if purchase is financed, and taxes and insurance. Note that Earnings are Seasonal, marked by a steep increase during certain seasons, however, for purposes of this Prospectus, we will assume a levelized rental. Expenses $175,000 Investment $200,000 Investment $250,000 Investment Cabin Price Land $ 200, Cabin $ 375, $ 575, Cash Investment $ 175, $ 200, $ 250, Amount Financed $ 400, $ 375, $ 325, Financing Term (in years) Financing Rate 6.00% 6.00% 6.00% Monthly Loan Payment Amount $ 1, $ 1, $ 1, Net Monthly Profit Monthly Net Income $ 2, $ 2, $ 2, Mortgage Payment $ (1,611.97) $ (1,432.86) $ (1,074.65) Property Taxes/Insurance $ (200.00) $ (200.00) $ (200.00) Utilities $ (600.00) $ (600.00) $ (600.00) HOA Dues $ (62.50) $ (62.50) $ (62.50) Net Profit/(Cost) $ $ $ Yearly Profit/(Negative Cash Flow) $ $ 2, $ 6, If cabin is owned and set up for tax purposes under the purchaser as an individual, all losses are deductible on Schedule E, Supplemental Income and Losses from rental real estate on Form This also requires personal use to remain below 14 days, or deductions may be limited. Similar tax consequences apply if purchased by an LLC. Assuming maximum tax bracket of 35%, and assuming passive activity gains available to offset the passive activity losses generated above, the net tax savings would be: Depreciation $ (13,636.36) $ (13,636.36) $ (13,636.36) Yearly Profit/(Loss) $ $ 2, $ 6, $ (13,330.00) $ (11,180.71) $ (6,882.12) Tax Bracket 35% 35% 35% Tax Savings $ 4, $ 3, $ 2, Value at Purchase $ 575, $ 575, $ 575, Appreciation 3% 4% 5% Value in Ten Years $ 772, $ 851, $ 936,614.41

5 Scenario: 20 Year Financing, 50% Management Fee These figures are only estimates and do not represent any earnings claims or guarantees. Approximately 1500 sq ft 3 Bedroom Cabin Income/Management Fee Annual Monthly Estimated Earnings per Cabin $ 70, $ 5, Less: Management Fee $ (35,000.00) $ (2,916.67) Net Income to Cabin Owner $ 35, $ 2, Management Fee includes all bookings/leasing of cabins, preparation of cabin for use, cleaning, hot tub sanitizing, stocking of all linens, bath soap, shampoo, conditioner, toilet tissue, paper towels, trash receptacle liners, hauling trash away from cabins, cutting grass, grading driveways, gutter cleaning and replacing light bulbs. Management Fee does not include Maintenance and Repairs to actual Cabin. Management Fee accounts for most expenses incurred by this investment other than the mortgage payment, if purchase is financed, and taxes and insurance. Note that Earnings are Seasonal, marked by a steep increase during certain seasons, however, for purposes of this Prospectus, we will assume a levelized rental. Expenses $175,000 Investment $200,000 Investment $250,000 Investment Cabin Price Land $ 200, Cabin $ 375, $ 575, Cash Investment $ 175, $ 200, $ 250, Amount Financed $ 400, $ 375, $ 325, Financing Term (in years) Financing Rate 6.00% 6.00% 6.00% Monthly Loan Payment Amount $ 1, $ 1, $ 1, Net Monthly Profit Monthly Net Income $ 2, $ 2, $ 2, Mortgage Payment $ (1,611.97) $ (1,432.86) $ (1,074.65) Property Taxes/Insurance $ (200.00) $ (200.00) $ (200.00) Utilities $ (600.00) $ (600.00) $ (600.00) HOA Dues $ (62.50) $ (62.50) $ (62.50) Net Profit/(Cost) $ $ $ Yearly Profit/(Negative Cash Flow) $ 5, $ 7, $ 11, If cabin is owned and set up for tax purposes under the purchaser as an individual, all losses are deductible on Schedule E, Supplemental Income and Losses from rental real estate on Form This also requires personal use to remain below 14 days, or deductions may be limited. Similar tax consequences apply if purchased by an LLC. Assuming maximum tax bracket of 35%, and assuming passive activity gains available to offset the passive activity losses generated above, the net tax savings would be: Depreciation $ (13,636.36) $ (13,636.36) $ (13,636.36) Yearly Profit/(Loss) $ 5, $ 7, $ 11, $ (8,330.00) $ (6,180.71) $ (1,882.12) Tax Bracket 35% 35% 35% Tax Savings $ 2, $ 2, $ Value at Purchase $ 575, $ 575, $ 575, Appreciation 3% 4% 5% Value in Ten Years $ 772, $ 851, $ 936,614.41

6 Scenario: 20 Year Financing, 50% Management Fee These figures are only estimates and do not represent any earnings claims or guarantees. Approximately 1500 sq ft 3 Bedroom Cabin Income/Management Fee Annual Monthly Estimated Earnings per Cabin $ 80, $ 6, Less: Management Fee $ (40,000.00) $ (3,333.33) Net Income to Cabin Owner $ 40, $ 3, Management Fee includes all bookings/leasing of cabins, preparation of cabin for use, cleaning, hot tub sanitizing, stocking of all linens, bath soap, shampoo, conditioner, toilet tissue, paper towels, trash receptacle liners, hauling trash away from cabins, cutting grass, grading driveways, gutter cleaning and replacing light bulbs. Management Fee does not include Maintenance and Repairs to actual Cabin. Management Fee accounts for most expenses incurred by this investment other than the mortgage payment, if purchase is financed, and taxes and insurance. Note that Earnings are Seasonal, marked by a steep increase during certain seasons, however, for purposes of this Prospectus, we will assume a levelized rental. Expenses $175,000 Investment $200,000 Investment $250,000 Investment Cabin Price Land $ 200, Cabin $ 375, $ 575, Cash Investment $ 175, $ 200, $ 250, Amount Financed $ 400, $ 375, $ 325, Financing Term (In years) Financing Rate 6.00% 6.00% 6.00% Monthly Loan Payment Amount $ 1, $ 1, $ 1, Net Monthly Profit Monthly Net Income $ 3, $ 3, $ 3, Mortgage Payment $ (1,611.97) $ (1,432.86) $ (1,074.65) Property Taxes/Insurance $ (200.00) $ (200.00) $ (200.00) Utilities $ (600.00) $ (600.00) $ (600.00) HOA Dues $ (62.50) $ (62.50) $ (62.50) Net Profit/(Cost) $ $ 1, $ 1, Yearly Profit/(Negative Cash Flow) $ 10, $ 12, $ 16, If cabin is owned and set up for tax purposes under the purchaser as an individual, all losses are deductible on Schedule E, Supplemental Income and Losses from rental real estate on Form This also requires personal use to remain below 14 days, or deductions may be limited. Similar tax consequences apply if purchased by an LLC. Assuming maximum tax bracket of 35%, and assuming passive activity gains available to offset the passive activity losses generated above, the net tax savings would be: Depreciation $ (13,636.36) $ (13,636.36) $ (13,636.36) Yearly Profit/(Loss) $ 10, $ 12, $ 16, $ (3,330.00) $ (1,180.71) $ 3, Tax Bracket 35% Tax Savings $ 1, Value at Purchase $ 575, $ 575, $ 575, Appreciation 3% 4% 5% Value in Ten Years $ 772, $ 851, $ 936,614.41

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8 Lot Number Price Lot Size (in acres) Location 1 - SOLD $225, Creek 2 $200, Creek 3 - SOLD $200, Creek 4 - SOLD $107, SOLD $ 99, $182, $182, SOLD $ 99, $161, SOLD $112, SOLD $142, SOLD $ 99, SOLD $125, $200, SOLD $250,

9 Cherokee Mountain Cabins (CMC) will handle and pay for all advertising Each cabin will have its own page listing on the Cherokee Mountain Cabins website - Telephone Inquiries Reservations Collect cabin rental charges from the guest CMC will collect and pay all North Carolina rental taxes Send check-in info, driving directions, etc. to guests Advise guests on activities in the area and on the property On-site property management ensuring security of all cabins Cabin will be cleaned after each guest All cleaning supplies provided by CMC Bed linens and towels are provided for each cabin An initial supply of shampoo, conditioner, and soap for each bathroom in the cabin Initial supply (about 2 days) of toilet paper, paper towels, laundry detergent, dishwasher detergent, and dish soap Installation of new light bulbs as needed. Cabin owner must furnish all bedspreads, comforters, bed skirts, pillows and pillow shams All towel and linens laundered/sanitized in our on-site high tech laundry facility All garbage and recyclables will be removed after each guest vacates the cabin.

10 Each hot tub will be sanitized before each guest arrival The hot tub will be emptied and refilled as required to maintain sanitation All decks will be inspected for cleanliness and safety reasons before each guests arrival Any debris on the deck will be removed and a two-day courtesy supply of firewood will be left for the guests campfire. Complete maintenance coverage. All repairs up to $150 will be carried out at no charge to the owner. (ALL charges will be calculated to include labor and material costs.) Any repairs over $150 will be the owner s responsibility and the Management of CMC will get the owner s approval prior to having the work done. The owner needs a detailed Spring Cleaning twice annually at a charge to be decided depending on the size of the owner s cabin. This charge is usually double the normal cleaning fee. Other Charges that will be the owner s responsibility. From time to time the owner will request the staff at CMC to help accomplish different projects. When this occurs an hourly rate plus materials (if applies) will be charged to the monthly owners report. Examples are: - Assist with set up of new cabin furniture and fixtures. - Set up TV, Satellite Dish and Internet - Install landscaping - Furniture change outs - Construction Cleans or Emergency Cleans - Light Bulbs and A/C Filter, inventory for your cabin. (We will change at no charge.) CMC will cut and weed eat the grass around the cabin and driveway as needed. Gravel driveways will be graded as needed Snow removal as needed CMC will clean out gutters as needed. (CMC does recommend gutter guards.) The owner agrees that CMC will deduct 50% from the owner s cabin gross rental income. (Gross income does not include our $35 reservation fee or North Carolina Rental Tax.) The 50% deduction is CMC s management fee Monthly payments will be made to the owner on the 15th of each month for the previous month s rental income. When the owner or owner s guest uses their cabin, the standard cleaning fee does apply and the fee will be charged to the owner s account.

11 Cabin rental fees will be determined by the number of bedrooms of the cabin. All cabins will be priced similar to or the same as CMC rates. This is done so pricing competition between cabin owners in The Village will not occur. The owner agrees to carry a One Million Dollar Liability Policy. With this policy the owner must name Nantahala Holdings, LLC dba Cherokee Mountain Cabins as an additional insured. The owner agrees to the terms of this agreement for one year. After one year has passed, the owner can cancel at any time with a six month written notice. This term will automatically renew at the end of it s agreement date. Owner s Name Cabin Name Cabin Address Signature of Owner(s) Date Date Cherokee Mountain Cabins Date