If you’re wanting to by an RV park, don’t forget that you only live once – don’t blow it! Instead of being concerned about entering a new sector outside your comfort zone you should be more haunted by the concept of missed opportunities. RV parks are attainable investments but only if you approach the business of finding good RV park deals in the right way. Here are the five steps required to accomplish this important mission.
#1: Write out your action steps and hire yourself to do them.
To get started on buying an RV park you need to 1) define the geography of where you are interested in purchasing the property 2) decide on the size of deal you are looking for – which is typically 5 times your down-payment capital and 3) clarify if you are wanting to buy an overnighter, destination or extended stay property. Then you need to acknowledge that you’re going to find the right property using four resources which are 1) on-line listings 2) brokers 3) direct mail and 4) cold calling. And, most importantly, if you’re going to do it right you need to make a commitment to yourself that you’re going to get the job done. There’s no way you’re going to have any success at finding and buying an RV park unless you really work at it and that requires pushing yourself.
#2: Focus on volume and “loading the ferris wheel”.
There was a guy named Joe Girard in the 1970s that was the #1 car salesman in the world and wrote a book about his approach to selling autos called “You Can Sell Anything to Anybody”. In the book he credits his success to constantly “loading a ferris wheel” with potential customers and banking on the fact that sheer volume would hit his quota of cars sold. This same philosophy is required to do well with RV park purchasing. You should look at a huge number of potential properties and work all sources of leads simultaneously with a strict focus simply on creating a huge level of volume.
#3: Make offers fast – don’t over-analyze them.
It does you no good to look at a high volume of deals unless you make offers on the ones that meet your criteria. And one rookie error is to waste time engaging in “over-analysis” prior to making each offer. While you want to give each deal enough reflection to establish a price, you are making that calculation using only the initial information the seller is giving you and is then subject to extensive due diligence once it’s under contract. Instead of spending a ton of time pondering numbers, just make a quick calculation, pitch that number to the seller, and move on to the next deal. The time to engage in “over-analysis” is once the RV park is under contract, not before.
#4: Get the point – “what do I have to do”.
When talking to the RV park seller, the key is to stay focused on the goal of getting the property bought. The general attitude on the buyers part should be “what do I have to do to have you sell me this RV park?” Remember that you are competing against all other potential buyers and speed is of the essence. If you don’t try to close the deal quickly another buyer may do so. This does not mean to be rude but to be enthusiastic. Instead of spending weeks or months with a back-and-forth on pricing hoping to get the seller to drop the price slightly, instead you should speed up the process and just get to the point.
#5: Never delay signing up a deal – that’s not the scary moment.
Another mistake is to have a fear of signing up RV park deals. Signing up is not the moment that you should be afraid of. Instead, you should be concerned at the moment you end due diligence and elect to go forward. As long as your RV park contract has a due diligence and financing contingency (which it definitely needs to have) there is no reason to lose sleep over executing the contract and starting the process. Remember that many deals break down in diligence and that probably 50% of all RV park deals get renegotiated in price at some point in the process. When you sign a contract you are merely starting what you hope will be a successful journey, but the real stress should be at the end of the journey – that’s when you make the final decision. I have a sign on my wall that reads “Time Kills Deals” and that is a reminder that all of us live under a constant sense of time urgency. Don’t lose deals because you don’t move fast enough!
You only live once and what you do today will have a huge impact on tomorrow. If you want to buy an RV park, then follow the five steps above and you’ll have a much better chance of hitting your goal.