Mini-Excavator

Last updated: 3 September 2020

We successfully carried out a group investment round to purchase in a mini-excavator that will be rented for infrastructure projects at Fruit Haven.

All 40 shares have been sold. Once the excavator is purchased, existing shareholders will be able to sell their shares if desired, so stay tuned to this page for future share offerings.


Email us at excavator.fh@protonmail.com

Details

Group Buy - $875 per share

Check out this PDF for details. We initially offered 40 shares for $875 per share. Each share will entitle the shareholder to 2.5% of the profits from renting the excavator.


This page will remain on the website for the reference of the shareholders.

Model / Specs

This is a 2008 Hyundai Robex 55-7 mini-excavator. Weighing in at 5.6 tons, it is big enough to make the roads at Fruit Haven, but small enough to enter homesteads and flatten areas for houses, make swales for fruit trees, or dig ponds. You can find more specs on this webpage. There are pictures of the machine (in action on Fruit Haven 1's new road) here.

Current Condition and Price

With only 7000 hours of use, we believe this machine to be in great condition, aside from cosmetic issues, and one known mechanical issue that is easily repaired (glow plug pre-heater sometimes doesn't work so it takes longer to start.) Upon purchasing it, our in-house mechanic, along with an experienced diesel mechanic from Gualaquiza, will do a thorough revision and repair of any minor issues so that the machine has a long and productive service life. We have the tools and experience to perform all necessary service on this machine at Fruit Haven (as we already do with our quad, motorcycles, dump truck, generators, chainsaws, and other equipment.)

The owner is asking $28,000 USD for this excavator.

Uniquely Safe Buying Opportunity

While we could scour OLX (the Ecuadorian craigslist) for a slightly cheaper deal or a bigger excavator, we think this is a great opportunity because we've already been renting this machine for over a year. We've witnessed very few mechanical problems aside from the occasional burst hydraulic hose. We know the owner well and have been renting his machines for over 2 years. Also, this excavator is already at Fruit Haven (1-3) so the expense to bring it across the Zamora river in a barge platform has already been made.

Return on Investment

This machine will be rented for $25/hr. This price includes the operator and fuel, so the owner ends up getting about $130 in a normal 8-hour workday, though maintenance will also take away from that over time.

It's hard to estimate an exact ROI since this depends on future projects. So to give you a general idea:

  • We have 900 meters of new road planned to FH7 which is 2-4 months of use

  • We have planned some driveways and road extensions to the future FH4, FH8 and FH9 properties, which should be many additional months of use

  • There are 27 Fruit Haven landowners and growing, who already have been renting this machine to make swales, ponds, and flatten areas for construction

  • Our neighbors could also rent the excavator when they need for various projects

  • The government is currently making a road that would connect the Fruit Haven properties and all other farms up and down the river, with the main road. This would give us the opportunity to rent the excavator to Terra Frutis and other properties affiliated with Fruit Haven within 1 year.

  • Full-time use the entire year would be around $31,000 in revenue (after operator and fuel) where-as full-time use for half the year would be around $16,000 in revenue (after operator and fuel.) This would more than cover maintenance. We can't make any guarantees for demand, but so far we've been renting this machine at least half the year that it's been here.

  • A shareholder can expect to have their share cost paid back in 2-3 years if the excavator is rented for only half the year, and 1-2 years if the excavator is rented for the full year. Any returns after that would be pure profit.

Management and Resale

  • As with all tools, Fruit Haven can administer its rental, keeping track of all incomes and maintenance expenses using double-entry accounting software and adhering to GAAP standards. The accounting is accessible on our server for property and equipment owners to check at any time. We charge a 5% commission on rental revenue for this service.

  • We can either sell this to 1 person, or organize a group buy where up to 40 people each put in $875 (or more for multiple shares) and gain a corresponding percentage of the profits. Either in this case or a sole proprietorship, it is easy to arrange a sale to another person if the owner needs to raise cash or no longer wants to own the machine.

  • We recommend that the buyer(s) invest an additional $7k to have on hand for maintenance that may be required, and to pay for the initial mechanical revision and basic maintenance (changing all fluids, replacing old hoses and seals, etc.) This will be accounted for as part of the project expenses. When a machine like this needs a major repair, it might be only once a year, but it might cost $3,000, and needs to get done within a week or it risks losing rental income. We will generally need to hold a cash reserve in case of repairs. However, the good thing is that with this reserve on hand, profits can immediately begin flowing back to the owners as we won't need to amass much additional reserves to cover unplanned maintenance.

Not a Fruit Haven owner? No problem!

We are opening this up to the general public, so if you aren't a Fruit Haven property owner, you can still invest in this excavator and reap the financial benefits.

Contact us if you are interested and have questions: excavator.fh@protonmail.com

Investment Details (PDF document)