A folding boat will always be discovered as a small wooden "box" — about 1-ft long, ½-ft wide, and ½-ft deep. 

It will, of course, radiate magic if detection is possible. The "box" can contain other things. 

If a command word is given, the box will unfold itself to form a boat of 10-ft length, 4-ft width and 2-ft depth. 

A second (different) command word will cause it to unfold to a 24-ft long, 8-ft wide, and 6-ft deep ship. 

The former will have 1 pair of oars, an anchor, a mast, and lateen sail. The latter is decked, has single rowing seats, 5 sets of oars, a steering oar, anchor, a deck cabin, a mast, and square sail. 

The first can hold 3 or 4 persons comfortably, the second will carry 15 persons with ease. 

A third word of command will cause the boat/ship to fold itself into a box once again. 

You may have the words of command inscribed visibly or invisibly on the box, have them written elsewhere — perhaps on an item within the box, or you might simply have them lost and require a search (via legend lore, consulting a sage, physical search of the dungeon, etc.) to discover them.