2021 will be no different than 2020 if you don’t take action today. Just like a gardener, you will not have a majestic oak in the future unless you plant that acorn today. And if you want to improve your financial health, then this is the time to make movement. For many investors, the correct action should be to buy an RV park. Just one of these assets can change your financial stability for generations. So how do you take the first steps toward successfully buying and operating an RV park?
Learn what you’re doing
The RV park industry is not just all about parking a bunch of RVs in a field – there is a definitive science to successful RV park buying and operations. Each segment of the industry has been analyzed, tested and the findings well documented. The #1 source of this information is the RV Park Investing Home Study Course, written and produced by the 5th largest RV/Mobile Home Park owners in the U.S., Frank Rolfe and Dave Reynolds. It’s reasonably priced and the “bible” of the industry.
Define a territory
Everyone has a place in America that they feel the most excited about as far as future potential is concerned. What’s yours? No matter what state, the key is to put your money where your mouth is and focus on these specific region for an RV park. All real estate is based on “location, location, location” and RV parks are no different.
Define what the target RV park “looks like”
Before you can start to look for RV parks, it’s imperative that you decide exactly what your future RV park “looks like”. This includes the deal size (roughly five to ten times your capital for a down payment) as well as the style of RV park (overnighter vs. destination) and even if you plan on living nearby and self-managing the property.
Maximize the number of target properties in your deal funnel
Now that you know what you’re looking for, the key is to maximize the amount of volume of deals that fit this description to review. There are basically four ways to find deals to investigate and consider: 1) on-line listings on such sites as Loopnet 2) industry brokers with both published and pocket listings 3) direct mail to current mom and pop RV park owners and 4) cold-calling existing mom and pop RV park owners. Between these four avenues you should be able to find a large number of potential deals that meet your criteria.
Make a ton of offers
“You never know till you try” is the perfect adage for buying an RV park. You will want to make as many smart offers as the opportunity presents itself. Regardless of the asking price, if the deal hits all your other criteria and only price is the remaining hurdle, then feel free to make an offer based on your estimate of value regardless of the seller’s asking price. You will be shocked at how many times the seller is willing to take a much lower amount.
Do great due diligence
Once you have an RV park under contract, it’s essential that you perform exceptional due diligence on it. Benjamin Franklin once said that “diligence is the mother of good luck” and that’s definitely true about RV parks. You will want to examine every number and feature of the property to make sure that it meets your standards and goals.
The financing options for RV parks have never been stronger and include such landmark options as SBA (Small Business Administration) loans at incredibly attractive terms. Other options are seller financing (which is a terrific option), bank debt or – based on the deal size – CMBS “conduit” debt. To get the loan you will need to build a solid loan package and display a good knowledge of your plan.
Close on the deal
Once you have completed the diligence and obtained the loan, it’s time to take the final step and make the property your own. If you have done all the correct steps you should have no stress at signing the documents and becoming the owner. This should be a time for celebration because the closing signals the completion of your journey – and the start of a new chapter.
Operate it correctly
Of course, buying an RV park will not change your financial future unless you operate it properly. The good news is that the playbook to successful RV park operations is well established and should not be an issue if you follow the science. RV parks are a very simple business and there is no technology out there to suddenly make it obsolete. Instead, the complex world we live in makes RV parks more desirable to your customers.
The first quarter of 2021 is coming to an end – but there are still three quarters to go and the bulk of the year is still your playing field. Take steps now to make your financial life more stable and enjoyable despite a tumultuous American economy. Take the first steps today.