Ranch for sale in Cabrera

[MikeFisher]

just curious to understand the counting:
making 10K a year, that's 100K neto over 10 years, which factor brings the sum to 800K of selling value?

thanks

Mike

 

[PeterInBrat]

I think he meant 100K a year...

 

[william webster]

Those business models/formulas may not work here.

Applying those to an inventory of living livestock (pun intended) would not be practical IMO.
The animals need food, care and are subject to illness and accident.

The asking price seems to account for these variables.

Buying an inventory of copper tubing in a distribution enterprise would be entirely different .

This is a business for the brave of heart and strong of heart.... totally hands on, 24/7/365.
Having a vet degree would help!!!

Seems like a good thing for someone who has the land to graze these horses- thus eliminating the rent component.

 

[PeterInBrat]

It's a waste of time to speculate how good a deal is until you do a walk-through, see the books and do some footwork to find out what kind of reputation the business has. A place can be doing great for 20 years, but then find out a competitor is going to open up shop right next to you with top of the line gear. An owner might want to sell while the books are good..

Aside from anyone who has actually seen this business, any number is simply a guess. If you actually can recoup the investment within a year(and support yourself), it's a very good deal indeed.

 

[Rancho Para?so]

Those business models/formulas may not work here.

Applying those to an inventory of living livestock (pun intended) would not be practical IMO.
The animals need food, care and are subject to illness and accident.

The asking price seems to account for these variables.

Buying an inventory of copper tubing in a distribution enterprise would be entirely different .

This is a business for the brave of heart and strong of heart.... totally hands on, 24/7/365.
Having a vet degree would help!!!

Seems like a good thing for someone who has the land to graze these horses- thus eliminating the rent component.

Hi William,
You are right on many points. "Traditional" business models often don't work in the D.R., and that's one reason you find so many foreigners who come here and lose their shirts on what they thought would be a sure thing.

On the "brave/strong of heart" point, I think the business actually requires passion: for the animals, customer service, etc. But I can tell you it is not a "totally hands on, 24/7/365" endeavor. These are Criollo horses that stay out in pasture and require much less attention than say, a Thoroughbred in a stall; no feed or hay to buy. They are much less prone to illness and injury. What the business DOES require is having someone who can communicate with the villas, hotels and their guests in English, and guide the tours in English. If it was my only business venture here I could easily manage it with one employee who checks on the horses every couple of days. And although the work is not particularly difficult, it is quite fun. This morning I did a small tour (for Castellamonte, actually), where we spent three hours riding up into the mountains and finishing up on the beach. It was only 4 people (our minimum) and I made $440usd plus tip in 3 hours. It could very well have been 7 people, which is about average, and I would have grossed $770usd plus tip. Not bad for spending my morning on a horse on the beach in the Caribbean!

And about owning the land vs renting, I pay $350 a month. As you can see, I paid for an entire month's rent with a very small tour this morning. If I were buying this business I wouldn't even consider buying the land for it; I'd rather invest that money in something else and let the business pay the rent.

Finally, I'm not a vet but I have certainly learned quite a bit on the job. Fortunately, I've never needed to call a vet for our Criollos.

 

[Rancho Para?so]

Good points Peter. And I would encourage anyone who is interested in buying the business to talk to all the people we do business with so they can get an idea of what our reputation is and what kind of work we do. A huge advantage we have is that we don't have competition but we have the trust of the villas and hotels in the area. So as long as the new owners keep up the good work, it is very unlikely that a new business will open up and take the market from you. These high-end villas don't want to trust their guests to just anyone who walks in off the street to put them on a horse!

 

[william webster]

Hi William,
You are right on many points. "Traditional" business models often don't work in the D.R., and that's one reason you find so many foreigners who come here and lose their shirts on what they thought would be a sure thing.

On the "brave/strong of heart" point, I think the business actually requires passion: for the animals, customer service, etc. But I can tell you it is not a "totally hands on, 24/7/365" endeavor. These are Criollo horses that stay out in pasture and require much less attention than say, a Thoroughbred in a stall; no feed or hay to buy. They are much less prone to illness and injury. What the business DOES require is having someone who can communicate with the villas, hotels and their guests in English, and guide the tours in English. If it was my only business venture here I could easily manage it with one employee who checks on the horses every couple of days. And although the work is not particularly difficult, it is quite fun. This morning I did a small tour (for Castellamonte, actually), where we spent three hours riding up into the mountains and finishing up on the beach. It was only 4 people (our minimum) and I made $440usd plus tip in 3 hours. It could very well have been 7 people, which is about average, and I would have grossed $770usd plus tip. Not bad for spending my morning on a horse on the beach in the Caribbean!

And about owning the land vs renting, I pay $350 a month. As you can see, I paid for an entire month's rent with a very small tour this morning. If I were buying this business I wouldn't even consider buying the land for it; I'd rather invest that money in something else and let the business pay the rent.

Finally, I'm not a vet but I have certainly learned quite a bit on the job. Fortunately, I've never needed to call a vet for our Criollos.

Sounds like a fun day.....I wasn't being critical - jusy offering an alternative view to the traditional business model.

 

[Ringo]

This horse business model is similar to how most of the local Dominicans do it. No real overhead but most of the horses are not in very good shape; at least to the gringo that knows horses that compares them to "back home". I don't know these horses so I don't know about what extra care they might be getting.

I know of 4 boarding type stables in our north coast area that have closed in 5 years. Mainly for boarding, riding lessons, horse training and some tourist rides. The costs of the overhead and the Expat owner not changing/adapting did them in. I know of 3 private stables that sold out and left for same reason with them thinking that having horses in the D.R. would be cheap and easy. As a horse owner, it is NOT cheap and certainly NOT easy if doing it the way you learned and did it "back home".

One also has to consider that these are field horses for a business and not your best buddy friend horsey. Thou care is important, they are not cared for in the same way we do our Paso Fino's. Different animals and our own mind-set regarding them.

Still way too many questions about this business. Does the leased land have a wash area? Prep area? Coral? Tack room? Office? Casita or Bunk house? How many horses? Saddles and tack? Age and condition of them an everything? Etc? I guess that I also would have a big problem with leasing the land. Most of us know about the problems one can have with the owner. Nothing like having a few horses...... and told to move.

 

[Rancho Para?so]

Sounds like a fun day.....I wasn't being critical - jusy offering an alternative view to the traditional business model.

I totally understand and didn't take your comments as critical. And again, you're absolutely correct about the traditional business model. There's very little that is "traditional" about business in the D.R.!

 

[Rancho Para?so]

Absolutely right, Ringo, and trying to run this business like you would in the States or Europe is, from my experience and that of others, not reasonable. And people kid themselves when they think they can do the boarding/lessons/training thing inexpensively; I don't know of a way to do it here and make a profit. And it would be almost impossible to keep these horses in stalls and not go broke!

As for the condition of our horses, reading some of the reviews we have received on Tripadvisor.com (aside, of course, from seeing the animals) will give some indication. Many people who ride with us are quite experienced and even own horses in the States, and are impressed with their condition, especially when they see how Dominican horses are usually kept.

Finally on the land, I guess those of us who live in the Cabrera area are quite fortunate when it comes to some of the "land/lease" issues you mention. We've been doing this for about 3 years and have had outstanding support from local landowners who know their money is a sure thing month after month. But I do hear horror stories from other parts of the country, with people paying up front and then getting kicked out or dealing with other madness.

 

[MikeFisher]

the first point, and that is the 1st point to do for any kinda biz, doesn't matter you are interested in purchasing a copper mine or goldmine or a biz running horses with tours in tourism, that point is:
YOU need personally visit the business, take a look on what is present, how it works and you need to do your observations for a period of time to get a real feel for quality of provided services, quantity of sales/clients present etc etc.
because ""books"" about a business's incomes/number of clients/expenses etc etc are the thing i would never trust on a book, you have to watch a biz you are interested in and do your own estimates to see if it fits your plans/ideas etc.
books are written by people, they show what people wanna show, specially in the DR.
forget the books.
if interested in purchasing a already running business, that means you have to watch that business and it's services for a period of time to get the right idea about it's volume/way of biz/value.
that's not meant towards the here discussed venture of a Ranch, it is meant as a basic rule for any kind of business someone would be interested to take over here in the DR.
you could also apply it to my own sports fishing business if for sales, for a truck safrai, a restaurant or a coppermine, first take a personal look over it for a time period and you find out soon how big of a clientel/market/sales venue is really present, with that a reasonable price for a purchase can be set.
books?, lolol.

Mike

 

[Ringo]

the first point, and that is the 1st point to do for any kinda biz, doesn't matter you are interested in purchasing a copper mine or goldmine or a biz running horses with tours in tourism, that point is:
YOU need personally visit the business, take a look on what is present, how it works and you need to do your observations for a period of time to get a real feel for quality of provided services, quantity of sales/clients present etc etc.
because ""books"" about a business's incomes/number of clients/expenses etc etc are the thing i would never trust on a book, you have to watch a biz you are interested in and do your own estimates to see if it fits your plans/ideas etc.
books are written by people, they show what people wanna show, specially in the DR.
forget the books.
if interested in purchasing a already running business, that means you have to watch that business and it's services for a period of time to get the right idea about it's volume/way of biz/value.
that's not meant towards the here discussed venture of a Ranch, it is meant as a basic rule for any kind of business someone would be interested to take over here in the DR.
you could also apply it to my own sports fishing business if for sales, for a truck safrai, a restaurant or a coppermine, first take a personal look over it for a time period and you find out soon how big of a clientel/market/sales venue is really present, with that a reasonable price for a purchase can be set.
books?, lolol.

Mike

Aww... come on Mike! I was just about to send you an offer on your boat. I have owned several sail and motor yatchs (lol) and restored a couple of antique ones. I was a Marine Surveyor for many years and I KNOW EVERYTHING about boats inside and out. I know a lot about fishing too. Do I use my fly rod or my stick with a worm on a hook with a bob?

The owner of the horse business appears to be sincere and I'm sure that he would be more then happy to spend a lot of time with a person that knows horses, tourist and the Dominican business savvy.

With the decrease in good tourist horse rides on good horses I'd be willing to consult and advise just cause I'm interested.



(plus I'm looking at buying an abandoned, run down, broke, needs work ... a lot of work, 16 stall stable on 15 acres between Sosua and POP... so no competition and it's more for my own horses and a few friends and would be interesting to see.)

 

[Rattus_Rattus]

Actually, "the lucky new owners of" a very successful, established, reputable and highly-rated business are getting a turn-key operation that has taken several years to develop into what it is. The new owners could easily pay our asking price with the business they'll do this upcoming high season alone. On the other hand, you could go out and buy some ranch land, a bunch of horses and tack, and try to start a business like this from scratch-no customers, no guidance, no reputation. What will THOSE new owners have? A whole lot of hope that maybe their business will work. And if it doesn't, then MAYBE they can sell all that land. But hey, at least they paid for "something", right?

You are missing the detail that a new owner most likely does not want to sell any land after a while. Some of us does not invest for future sale.
The only thing that is good to have in this country today is either alot money or Land with clean title. So instead for giving away their familys money for "rent", he buy alot of land for the same price- and then his family has plenty of time to develop a customerbase.

Just my view on this offer. No offense intended. Good luck with your business.

 

[MikeFisher]

Aww... come on Mike! I was just about to send you an offer on your boat. I have owned several sail and motor yatchs (lol) and restored a couple of antique ones. I was a Marine Surveyor for many years and I KNOW EVERYTHING about boats inside and out. I know a lot about fishing too. Do I use my fly rod or my stick with a worm on a hook with a bob?

The owner of the horse business appears to be sincere and I'm sure that he would be more then happy to spend a lot of time with a person that knows horses, tourist and the Dominican business savvy.

With the decrease in good tourist horse rides on good horses I'd be willing to consult and advise just cause I'm interested.



(plus I'm looking at buying an abandoned, run down, broke, needs work ... a lot of work, 16 stall stable on 15 acres between Sosua and POP... so no competition and it's more for my own horses and a few friends and would be interesting to see.)

Ringo,
that's eaxctly my own impression.
the seller/owner sounds very sincere to me,
and people talking about the need to own the land to run such tour will most likely not have any experience as Land and Ranchowners in the DR, or they would know that such biz is run exactly as Rancho Paraiso did it, as fact they are one of very very few ranches running a good business, most are looking broke and do not even invest moneys to maintain their animals properly, while Rancho Paraiso seems to do a good job on that.
as far as specific businesses go, you could have been a Marine Surveyor for decades and it would not mean anything about starting or taking over a sportfishing business, the same for owning motoryachts or sailboats or a chicken farm, it doesn't count.
what counts is to have a mind with some experience as a business owner in general, and with that OBSERVE a interesting looking business for a while and by that build up the kowledge to be able to set a value for a specific business.
i do not need to be the owner of the Cap Cana Marina to run a Sportfishing Business like Mike's Marina at that Cap Cana Marina. and vice versa, to be the owner of the Cap Cana Marina does NOT mean you are capable of running a Sport Fishing business at that Marina, even that such owner also owns many high class motoryachts, sports fishing yachts and other water/marina attached things. it is different worlds one to an other.
so to overtake a business which is already established/running/already existing, the most important thing to do prior to a purchas is to observe the business and get the correct feel for it, that way the real value shows automatically up and can be accounted for, then purchase.
i know some people who own private piers/small Marinas, none is doing nice, as fact they are badly broike and no biz runs from there.
you do not need to own land to run a successful Ranch/horse business, the opposite, i say the risk of failure is much too big purchasing a large area of ranchland only to run a horseback riding excursion on it, would not be worth the monies spent.
Rancho Paraiso did it absolutely right, lease the needed space/property, and build your excursion up there. their success sine some years(over 2, maybe 3) shows that it is the right way to go to make it worth the effords.

Mike

 

[webmacon]

Hmm don't get this one.

So I'm offering my part of the business which brings me little over 100k a year for a 100k, that means it's offered way to cheap ?!?

I thought like a one year profit figure would be ok, any advise here?

just curious to understand the counting:
making 10K a year, that's 100K neto over 10 years, which factor brings the sum to 800K of selling value?

thanks

Mike

 

[MikeFisher]

in my opinion, and each can have it's own, a one year profit figure would be WAAAY to cheap to sell any kind of running and established business. would be a gargain.

Mike

 

[PeterInBrat]

Here is their website. Could use a slideshow, but having a site at all is a big plus in the DR and DRHorses is a pretty good URL to have:

Rancho Paraiso | Horseback Riding in Cabrera Dominican Republic 829-663-RIDE Come Ride in Paradise

 

[rubio_higuey]

What the business brings in and selling price, is called P/E (price/earnings) ratio.

Most public companies on stock exchange trade for about 15-30 p/e ratio, meaning that when you buy stock, it would take 15 to 30 years to get your money back from the dividends. Stocks on stock market are not bought because of dividends, but because of growth potential. The dividend is a cherry on the top, but a cherry that can be sweet or sour and move the stock price up or down.

Private enterprises in developed world (not traded on stock exchanges) are sold for 7 to 10 p/e, and in some exceptional cases for 10 to 12 p/e. Here in the DR a p/e of 5-7 years would be pushing it, unless the assets support it, or in other words if the net assets warrant purchase price of 5 - 7 p/e and business has growth potential (e.g. a business in distress which could be finely restructured) then 7 years p/e is the maximum in the DR. Good large businesses could be sold for p/e of 5, and small businesses running well could be sold for p/e of 3.

 

[PeterInBrat]

But one thing that is a HUGE factor is whether it truly is a turnkey operation or if you have to be working full time to have it produce any profit at all. Many people consider any business which couldn't make a profit over what it would cost you to have someone else manage the place as not having a profit at all.

 

[Rancho Para?so]

the first point, and that is the 1st point to do for any kinda biz, doesn't matter you are interested in purchasing a copper mine or goldmine or a biz running horses with tours in tourism, that point is:
YOU need personally visit the business, take a look on what is present, how it works and you need to do your observations for a period of time to get a real feel for quality of provided services, quantity of sales/clients present etc etc.
because ""books"" about a business's incomes/number of clients/expenses etc etc are the thing i would never trust on a book, you have to watch a biz you are interested in and do your own estimates to see if it fits your plans/ideas etc.
books are written by people, they show what people wanna show, specially in the DR.
forget the books.
if interested in purchasing a already running business, that means you have to watch that business and it's services for a period of time to get the right idea about it's volume/way of biz/value.
that's not meant towards the here discussed venture of a Ranch, it is meant as a basic rule for any kind of business someone would be interested to take over here in the DR.
you could also apply it to my own sports fishing business if for sales, for a truck safrai, a restaurant or a coppermine, first take a personal look over it for a time period and you find out soon how big of a clientel/market/sales venue is really present, with that a reasonable price for a purchase can be set.
books?, lolol.

Mike

VERY much agree. That's part of the reason we're hoping to sell the business to someone who already lives in the Cabrera area, as folks are very familiar with its success and how it is run.