Case: Crooked Creek Golf Development Date: January 2012 Jacob and Nate MacVey are brothers who co-own a construction company called Mac Brothers Construction. They are both in their 40's and the business has been very successful. They build higher quality homes in the $200,000 to $400,000 price range in and around the Huntsville, Texas area. They have also both been avid golfers since they were young Henry MacVey is the father of Jacob and Nate. Henry owns a 565 acre farm about 5 miles from Huntsville city limits. He once ran a large cattle operation, but has since cut back as his kids have grown and started their own business. Henry taught his sons to play golf, and is a very good player himself The family has decided to begin a new business which they believe will take advantage of their talents and interests. They would like to develop a large portion of the family farm into a golf course and residential community called Crooked Creek (named after a small branch which runs through the property). They have worked with a well-known golf course architect to design the course and lot layout. The course and club house will use about 160 acres of property. After all the necessary roads and easements, there will be 172 home lots ranging from 1 to 3 acres Their plan is to develop the golf course and club house as soon as possible. After it is up and running (it will take a year to complete), they will begin construction on the roads and other infrastructure (lights, water lines, sewer, etc.) and develop the lots in five phases. Phase 1 will include 31 lots, Phase 2 will include 43, Phase 3 will include 34 and many of the larger lots, Phase 4 will include 40, and Phase 5 will include the final 24. Their goal is to sell 75% of a phase before developing the next phase and opening it for lot sales. Golf course construction is estimated at $1.8 million. Henry has $400,000 in retirement savings which he can use for the project, and Jacob and Nate can also contributing about $200,000 each. They are requesting the other $1 million as a loan from Bearkat National Bank. They will also contribute $100,000 in cash into the business to provide working capital once the course is operating. Crooked Creek Golf Links is a limited liability company owned by Henry, Jacob, and Nate. None of the borrowers are current bank customers, but they are well known and well respected in the community Projections All the McVey's are members of a local country club, and many of their friends are either members or regularly play. Their new course will be a public course (meaning anyone can play) but will also offer memberships. They will set greens fees at $35, and annual memberships (which allow for unlimited play) will be $1500. Their projections for rounds of golf "sold" and annual memberships are below: Case: Crooked Creek Golf Development Date: January 2012 Jacob and Nate MacVey are brothers who co-own a construction company called Mac Brothers Construction. They are both in their 40's and the business has been very successful. They build higher quality homes in the $200,000 to $400,000 price range in and around the Huntsville, Texas area. They have also both been avid golfers since they were young Henry MacVey is the father of Jacob and Nate. Henry owns a 565 acre farm about 5 miles from Huntsville city limits. He once ran a large cattle operation, but has since cut back as his kids have grown and started their own business. Henry taught his sons to play golf, and is a very good player himself The family has decided to begin a new business which they believe will take advantage of their talents and interests. They would like to develop a large portion of the family farm into a golf course and residential community called Crooked Creek (named after a small branch which runs through the property). They have worked with a well-known golf course architect to design the course and lot layout. The course and club house will use about 160 acres of property. After all the necessary roads and easements, there will be 172 home lots ranging from 1 to 3 acres Their plan is to develop the golf course and club house as soon as possible. After it is up and running (it will take a year to complete), they will begin construction on the roads and other infrastructure (lights, water lines, sewer, etc.) and develop the lots in five phases. Phase 1 will include 31 lots, Phase 2 will include 43, Phase 3 will include 34 and many of the larger lots, Phase 4 will include 40, and Phase 5 will include the final 24. Their goal is to sell 75% of a phase before developing the next phase and opening it for lot sales. Golf course construction is estimated at $1.8 million. Henry has $400,000 in retirement savings which he can use for the project, and Jacob and Nate can also contributing about $200,000 each. They are requesting the other $1 million as a loan from Bearkat National Bank. They will also contribute $100,000 in cash into the business to provide working capital once the course is operating. Crooked Creek Golf Links is a limited liability company owned by Henry, Jacob, and Nate. None of the borrowers are current bank customers, but they are well known and well respected in the community Projections All the McVey's are members of a local country club, and many of their friends are either members or regularly play. Their new course will be a public course (meaning anyone can play) but will also offer memberships. They will set greens fees at $35, and annual memberships (which allow for unlimited play) will be $1500. Their projections for rounds of golf "sold" and annual memberships are below