SUBDIVISION FOR SALE:  Phase II (undeveloped area) of beautiful lake view property in Sierra County, New Mexico.  Engineering by Bohannan Houston, one of New Mexico's leading civil engineering firms, includes aerial survey and topographic maps.  All plats approved by Sierra County and recorded.  Having well engineered and approved existing plats saves the buyer about 4 years and approximately $500,000 in engineering costs.

Phase I developed area is about 500 acres in the northeast corner of the subdivision where 75 homes have already been built with an average value of $400,000.  The lake views, pristine setting, large lots (2 acres average) and home quality make this the most desirable neighborhood established in the county to date.

Phase II that is offered here would be an extension of the existing developed area and is already platted in the same manner.  The new area will only require staking of lots, building and paving roads and extension of the underground electric and telephone mains.  It is also advisable to add natural gas.  This would add considerable value and appeal to the property for a retail lot buyer.  In the existing neighborhood, each homeowner has installed their own well, septic system and propane tank.

The area is located half way between Albuquerque and El Paso (140 miles to either major airport) and also midway between Las Cruces (75 miles south) and Socorro.  The population of those four areas combined is approximately 2,670,000 people.  Las Cruces and Socorro are also homes to major state universities.

East and south boundaries of the subdivision border Bureau of Reclamation land, the federal agency that operates the Elephant Butte Dam.  BOR leases this portion of their land to the New Mexico State Parks.  North and west sides of the subdivision front Bureau of Land Management property leased to ranchers for grazing.  Being completely surrounded by government land is a great advantage to a buyer.

SUBJECT PROPERTY FEATURES:

Size – Six hundred thirty three (633) lots, averaging of 1 – 4 acres each, on a total net area of 1,515 net acres.  The gross area with drainage and roads equals approximately 2,100 acres.  Thirty six (36) acres within the perimeter of the undeveloped area are not included.

Existing Utilities – Sierra Electric Coop and Valor Telephone mains to the property.  Public Service Company of New Mexico natural gas line is approximately two miles away.  The estimated cost to extend gas to the property line is $50,000.

Terrain – Hills and valleys with general slope upward to the west, provides best views of the lake compared to any other deeded land in the County.  Major drainage areas (arroyos) set aside as green belts, minor drainage areas go through some lots.

Title – Title is held free and clear with no liens or encumbrances.  Taxes are current.  Title commitment is available within a few days of signing a purchase agreement.

Water Rights – Not necessary if present development plan is continued.  If buyer elects a different plan such as to re-plat with smaller lots with water and sewer systems, water rights would be necessary at additional cost.

EXISTING AREA AMENITIES:

Sierra County covers an area about the size of Connecticut.  82% of the land is owned by various government entities:  Gila National Forest, Gila Wilderness, White Sands Missile Range, Elephant Butte Lake State Park, Caballo Lake State Park and many square miles of BLM and State Land leased to ranchers.  The 18% of private land is primarily owned by Ted Turner and other large ranches and farms.  There is very little fee simple land available for development.  The County has announced it is building a new courthouse in 2008. 

Elephant Butte Lake is a man-made lake formed by damming the Rio Grande River.  When full, the surface area is 57 square miles, the largest lake within a 500 mile radius.  The lake provides excellent fishing, sailing, water skiing, jet skiing and camping.  It also provides irrigation to the Rio Grande Valley.  Its shore line is mostly sand beaches, rather than the rocks and mud of most other lakes.  The lake and surrounding area is managed by the New Mexico State Parks system.  There are 3 full service marinas on the lake providing boat and jet ski rentals, fishing supplies, slip and dry dock rental, food and beverage, and boat repair.  Elephant Butte Lake State Park is the most popular recreation and tourist attraction in the state, recording the highest traffic counts.  Carlsbad Caverns is second in traffic counts for a single tourist facility attraction.

Truth or Consequences Airport can handle the largest private jets, including Ted Turner's planes.  Mr. Turner owns two ranches in Sierra County totaling about 800,000 acres and he lands at the airport frequently.  Even though facilities are already adequate, major upgrades are now being planned.  The City and State Aviation Office are now expediting the construction of a new 10,000 feet, cross wind runway in 2008 to enhance prospects for obtaining the proposed amenities now considering the area (see below).  These entities have indicated that these improvements and the new traffic created by the new amenities could result in scheduled commercial flights.

The City of Truth or Consequences has a population of approximately 7,500 and offers art galleries, antique shops, hot mineral baths and an excellent museum of local history.  The existing hospital is preparing to build a new facility in 2008.  A new high school was completed in 2006.  Construction is nearing completion on the area's first Walmart.  The city is also the county seat.

The City of Elephant Butte was incorporated only 10 years ago and now has a population of 2,000.  It is the gateway to Elephant Butte Lake State Park and offers two motels, 5 restaurants, 2 churches, a boat dealer, 3 boat repair shops, 3 real estate offices and many boat and RV storage facilities.  The City is now building its first sewer system which will provide for major commercial growth. 

Turtleback Mountain Resort opened August 15, 2007, in Elephant Butte with a world class 18 hole golf course and club house on its 1,000 acre, high quality development.  It is believed that with its wide area marketing, Turtleback will attract many new people to Elephant Butte.  Some will buy homes in Turtleback and others will buy in surrounding neighborhoods, including the one offered here.  Of course, some of those visitors will not purchase real estate, but will boost the local economy with significant purchases of goods and services. 

PROPOSED AREA AMENTITIES:

Spaceport America already has temporary facilities about 30 miles southeast of Elephant Butte Lake.  This will be the nation’s first private industry facility for rocket launching and landing.  The State of New Mexico has purchase the land and leased it to Sir Richard Branson of Virgin Airlines.  His Virgin Galactic Company has now collected $20 million in deposits from 1,000 customers for a 45 minute flight into space at a cost of $200,000 each.  The first flights are scheduled for 2009.  Design work on phase one of the permanent facilities have been contracted by the New Mexico Space Authority, Brandon’s landlord.  Design cost is estimated at $30 million with construction at $200 million.

Other for-profit operations planned for the Spaceport:  launching satellites for private companies, cargo deliveries around the world in unmanned crafts and extended vacations to the space lab or to the moon.

Local community leaders are very supportive of this project:  two bridges on the road to the site are being rebuilt by the County and State to carry heavier truck traffic.  Part of the financing for the Spaceport requires a small increase in sales tax for Dona Ana County (Las Cruces) and Sierra County.  These increases require a general election vote and Dona Ana has already passed and Sierra votes in the next few months.

Hot Springs Motorplex.  An investment group from Florida is planning a major industrial, commercial and residential development of 10,000 acres centered around the Truth or Consequences Airport on what is now government land extending east to this subdivision.  The project depends upon a trade between the BLM and the New Mexico State Land Office and a second trade between the Land Office and the developers.  The agreement on the first trade has already been signed and it was considered the most difficult step in the process.

The group has been working on the project for 4 years and have named it Hot Springs Motorplex.  The Master Plan proposes an oval track, a road course, an off road course, a drag track, race car maintenance facilities, training facilities, auto and airplane museums, an industrial park, an office park, hotels, restaurants, a golf course, shopping centers and residential developments.

Local and State officials and the public at large have been very support of these projects.  Generally, residents have supported initiatives that add jobs and tourism to the economy.

SUBJECT PROPERTY PRICING & ESTIMATES:

Pricing:

The purchase of Phase II of this subdivision represents an incredible development opportunity.  The location and natural beauty of the property, combined with the rapidly growing interest, is a perfect combination to leverage the profits available.

The Pro-Forma Estimates provided below are considered very conservative and the net profits to be realized could be enhanced considerably depending upon a developer’s existing resources.  Some examples:   handling sales and marketing in-house would save considerably over the budgeted expenses; offering financing could significantly shorten the period of time required to sell the inventory saving carrying costs and also adding the interest income to be realized; one could either construct homes on the lots or partner with builders for shared revenues; and, price increases are expected as the planned amenities are developed but are not included in the projected revenues. 

The estimated selling prices for the lots are based upon historical sales in Phase I and in the area with some consideration attributed to the proposed amenities being realized. 

With an estimated average value of approximately $105,000 per lot as currently platted and after developed as currently planned (total value estimate = $66,450,000), this entire parcel is available from JPIH for $8,250,000 as-is. 

Pro-Forma Development Estimates For Phase II (Conservative Approach):

633 lots to be sold over 10-year period.

Beginning Price Range of $65,000 - $150,000.

Ending Price Range of $150,000 - $400,000.

Assuming no price increases and all sales made at Beginning Price Range:

                211 lots @ $65,000       =             $13,700,000

                211 lots @ $100,000    =             $21,100,000

                211 lots @ $150,000    =             $31,650,000

                Total Revenues                                                                                $66,450,000

Less:      Acquisition Cost              =             $  8,250,000

                Development Cost          =             $  7,700,000

                Carrying Cost                    =             $  4,000,000

                Sales & Marketing            =             $12,000,000

                Contingencies                   =             $  4,000,000

                Total Costs                                                                         $35,950,000

                Net Profit                                                                            $30,500,000

Guidelines For Purchase