An owner-built RV resort and entertainment venue, underwritten as one reconciled model. The thesis is a 100% first-year bonus-depreciation shield under OBBBA §168(k) paired with real-estate-professional (REPS) treatment, carrying levered returns that stay intact after the exit-disposition tax is modeled honestly.
560 Town Center Dr, Jarrell TX 78644 · 13|7 Frameworks LLC · Analysis 2026-07-05
Riddler's Run pairs an RV resort with an entertainment venue (White Rabbit) on a single Jarrell, TX site off the I-35 Exit 275 frontage. The build was approved on 2026-07-04 as Option 3 — the full build — and modeled at a grand total project cost of $14,669,141.
The financial case rests on two levers. First, the resort is land-improvement-heavy — lagoon, RV pads, turf, courts, and parking — which pushes a large share of basis into 5- and 15-year cost-segregation buckets that qualify for 100% first-year bonus depreciation under OBBBA §168(k) (IRS Notice 2026-11). Second, real-estate-professional (REPS) treatment at a 37% rate lets that depreciation shelter non-passive income, producing an estimated $3,527,928 Year-1 tax shield.
This model reconciles five advisory disciplines — Finance, CPA, CFA, Insurance, and Legal — into one artifact. It also carries the unflattering findings openly: a Year-1 debt-service shortfall during lease-up, 1099 crew classification exposure, and several assumptions that a property-level trailing-twelve would firm up.
| Revised baseline | $13,758,341 |
| Golf zone (newly priced) | $688,500 |
| Added parking · 150 spaces | $139,500 |
| Soft costs / contingency (10% on new adds) | $82,800 |
| Grand total project cost | $14,669,141 |
Original total $14,620,041 less $861,700 of confirmed cuts gives the revised baseline. CPA depreciable basis ties exactly to this grand total under the 100%-improvements assumption. Note: ~$5.25M of the baseline scope (lagoon, White Rabbit structure, site work, amenity station, micro-cabins) is not itemized in the source model — a labeled data gap.
Draw is equity-first for the first six months, then loan-funded, on a standard 18-month S-curve (an assumption on curve shape). The capitalized interest carry confirms the lender's interest-reserve requirement at closing.
The deal is shown four ways so the tax mechanics are legible. The headline figure is the last row: levered, post-tax, and net of the modeled Year-10 exit-disposition tax — the honest number.
| Basis | NPV @ 12% | IRR |
|---|---|---|
| Unlevered, pre-tax | $1,560,710 | 13.5% |
| Levered, pre-tax | $4,048,487 | 21.0% |
| Post-tax, excl. exit tax | — | 31.8% |
| Post-tax, incl. exit tax | $4,162,280 | 28.9% |
All figures are modeled estimates, not guaranteed returns. NPV discounted at 12%. The 31.8% (excl. exit tax) row ties to the prior v2 basis; the 28.9% row nets out the Year-10 disposition tax this version adds.
| Net sale price (after selling cost) | $24,180,189 |
| Adjusted basis at sale | $3,817,740 |
| Total gain | $20,362,449 |
| §1245 ordinary recapture @ 37% | $1,899,654 |
| Unrecaptured §1250 @ 25% | $1,429,300 |
| LTCG on appreciation @ 20% | $1,902,210 |
| Estimated total exit tax | $5,231,164 |
Estimate. §1245 personal property and §1250 additional depreciation taxed as ordinary at the 37% REPS rate; unrecaptured §1250 at 25%; residual appreciation at 20% LTCG. NIIT and state tax not modeled. Formal cost-segregation study and tax-advisor review required.
Debt-service coverage ratio (DSCR) by year on the P50 revenue build. Year 1 does not cover debt service during lease-up; coverage crosses 1.0× in Year 2 and stabilizes near 1.85× from Year 3.
Year-1 NOI $544,158 falls short of the $910,591 annual debt service, giving a 0.60× coverage ratio. A debt-service reserve of roughly $366,433 covers the Year-1 shortfall; the ~$540,165 construction interest carry sits alongside it as a lender interest reserve at closing.
Post-tax IRR across the two assumptions that move the model most: the exit cap rate and the stabilized NOI margin. The base case (8.0% cap, 34% margin, 28.9% IRR) is outlined.
| Exit cap ↓ / NOI margin → | 30% | 34% | 38% |
|---|
Surfaced, not buried. The two high-severity items are structural to the deal and require a decision or a reserve; the rest are assumptions to confirm.
Year-1 NOI $544,158 is below the $910,591 annual debt service. A debt-service reserve of ~$366,433 is required for Year 1 (Year 2 recovers to 1.22×). The construction schedule confirms a lender interest reserve (~$540,165 carry) at closing. Stabilized coverage is healthy at 1.85×.
13|7's traveling crew is 1099. Texas Workers' Comp is non-subscriber-optional, and a standard WC policy does not cover 1099 workers — they need Occupational Accident plus contingent liability, or must be run W-2 on a WC policy. A 1099 crew directed like employees creates IRS/TWC misclassification exposure (back taxes, penalties, uninsured-injury liability). Decision required. Separately, any subcontractor without valid WC has its payroll charged back to 13|7's WC at audit — enforce COIs and additional-insured status before mobilize.
No published RV-resort NOI-margin or cap-rate series exists. Stress-tested across the sensitivity grid; a property-level trailing-twelve or broker opinion of value would firm them.
Named P1 ($3,836,868) + P2 ($4,668,016) = $8,504,884, which is $5.25M short of the $13,758,341 baseline. The source model does not itemize the lagoon, White Rabbit structure, site work, amenity station, or micro-cabins.
The prior version omitted all exit tax. This version estimates $5,231,164 of §1245/1250 recapture plus LTCG on the ~$20.4M gain, cutting post-tax IRR from 31.8% to 28.9%. Estimate — formal cost-seg and tax-advisor review required; NIIT/state not modeled.
The revenue build implies roughly 67 RV pads at a sourced ADR of $120, 76% occupancy, and a 45% RV revenue share (an assumption). Confirm pad count and stream mix against the site plan.
If raw land cost is embedded in the $14.67M, non-depreciable land must be carved out and the Year-1 shield plus recapture re-cut. This is the one open reconciliation item.
Traceability. The advisory stack — Finance → CPA → CFA → Insurance → Legal — was run as one reconciled model. Shared figures (cost basis, revenue P50, depreciable basis, builder's-risk base) tie out across all five disciplines. Every figure on this site traces to a source, a driver, or a labeled assumption; none are fabricated.
Tie-outs. CPA depreciable basis ($14,669,141) equals the Finance grand total. CFA revenue build P50 ($4,954,996) reconciles to the Finance baseline ($4,954,000). Tax method is OBBBA §168(k) 100% bonus (IRS Notice 2026-11) with REPS at 37%.