Have you ever driven by a really good RV park and wondered “how did that person buy that”? I’m talking a veritable institution of a park, that has a phenomenal location and is packed with customers. Well, the truth is that most of those properties are not purchased like that to begin with, but are groomed to that position by the owners over a span of time, having been purchased for a cheap price before the turn-around. Except for some large, institutional buyers like ELS and SUN (two American REITs), most people can’t afford – or won’t take the risk – of buying a property that is running on all 8 cylinders. Instead, they prefer to buy properties that are broken and then fix them. “Broken” RV parks typically 1) have poor marketing and low occupancy 2) have deferred maintenance that makes the park look undesirable and scares off customers 3) have improper rate structure 4) have expenses that are far too high based on industry norms and 5) terrible word of mouth due to one or all of the above. When you look at buying an RV park, look beyond what it currently “is” and look more at what it “can be”. That’s how you make the great buys.
Memo From Frank & Dave
How Much Is Your Freedom Worth?
You only live once. Are you living in the manner you really want? Or can you get more out of life? Many people have found a much happier life through owning an RV park. Here are some of the benefits to living as an RV park owner, as opposed to your current 9 to 5 day job.
A recent study found that 60% of Americans have less than $1,000 in savings. That’s a tough way to live. Even high-earners can find themselves lacking in a safety cushion due to the insanely-high cost of living in most cities. RV park owners, however, find that they have perpetual financial solvency, as there income is high and their cost of living is low. The Great Outdoors does not charge for its beauty, and the finest things in life really are free. Is it time to declare your own American Revolution?
Be your own boss
When you own an RV park, you answer to nobody but yourself and your customers. You have no boss to order you around or take credit for your work. You are 100% in command and call all the shots. These one reason alone is very compelling to many people buying RV parks. Life is too short to spend it in an unhealthy work environment with a toxic supervisor.
RV park ownership allows you to devote your time as you see fit. You can take off any day and time you want. Obviously, you have to be realistic, as you’re trying to run a business and the bulk of your traffic is on weekends. That being said, you have much more options during the week and holidays than someone with a regular day job. And, to be honest, when you run the business you have very little stress and actually have fun working, so you may find your new favorite activity is, in fact, working at the RV park.
Insulation from a declining U.S. economy
Yes, the U.S. is in financial decline. But that does not have to extend to you. As an RV park owner, your client base is predominantly those 10,000 per day retiring Baby Boomers, who are self-unemployed and proud of it. They receive a monthly social security check, dividends and pension, and could care less if unemployment stands at 6% or 60%. They are there to enjoy their retirement years and already have the money saved to do so. And that does not count those younger people who use their RV as a way to cut vacation costs – which is also a growing market.
When you die, how much of that company you currently work for goes to your kids? Zero. When you own an RV park, you are able to leave an inheritance to your kids that is very meaningful. Multi-million dollar RV parks are common, and the income off that RV park might support your kids for a lifetime. Want to be a hero to future generations? Then an RV park might be the answer.
Buying an RV park could truly change your life. You are making a giant mistake if you don’t at least explore the opportunity.
RV Park Home Study Course
Our Home Study Course is not like anything you have ever listened to or read before. We do not fill it with a bunch of fluff on how your are going to make a million bucks with no money down. We tell you the whole story... the good, the bad, and the sometimes ugly.
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What Harvard Business School Would Say About RV Parks
Harvard Business School is an esteemed institution of higher learning. While we are unaware of any RV park textbooks that come out of Cambridge, we believe that Harvard Business School would be very bullish on the RV park business model for a variety of reasons.
High rate of return
Harvard Business School is all about making money. And the best way to measure different ways of making money is through what are known as “rates of return”. These are ratios of what is received based on what is spent. And RV parks have an exceptionally high rate of return. Most RV parks are purchased for roughly 10% cap rates or higher, and often yield more than 20% cash-on-cash per year.
No chance of obsolescence
An RV park, by definition, is a parking lot for RVs. Parking lots never go out of style, and there’s no technological innovation to make an RV park not necessary. Compare that to the thousands of companies that woke up one day and found that there was no longer a need for their services (8-track tapes, silent movies, the flip phone, etc.). Harvard would find the durability of the RV park business model extremely attractive.
Candidate for Sensible Leverage
RV parks can obtain bank financing. That’s a very important point, and one that Harvard would support. Leverage is one of the key drivers to high rates of return with real estate. Here’s an example. If you bought an RV park at a 10% cap rate for all cash, your cash-on-cash return would be 10%. But if you financed that same RV park with 20% down, and the interest rate on the loan was 6%, the cash-on-cash return would be over 24%. Since Harvard is all about rates of return and sensible leverage, they would highly approve.
In-line with U.S. Megatrends
Harvard knows that a successful business must be in alignment with all major economic trends. And RV parks are tied to one of the biggest trends of this century: the aging of the Baby Boomers (those born between 1946 and 1964). This group is the largest demographic in the U.S., and is currently retiring at the rate of roughly 10,000 people per day. As a result, many of these retirees are buying RVs and traveling the U.S. to enjoy their golden years, paying their costs with Social Security checks. This trend continues for the next several decades. This one trend is so powerful, it is changing America in every way. RV sales alone are accelerating at the rate of roughly 15% per year.
You need to feel good about every deal from beginning to end. No exception. If your gut instinct is not in alignment with what everyone is telling you, believe in yourself above all others.
Roughing It Is Not For Everyone: The Importance Of Diversity
Americans love the “freedom of choice”. And they all like different things. Can you imagine a restaurant with only one item on the menu? So that’s why it’s important to have a range of options at your RV park, so that you can meet every appetite and every budget. RV parks have long been thought of as places for those who like to “rough” it, the successful RV park should have an option for every desire.
OK, this is the most rustic of all options. You pitch a tent, cook on a fire, and live as your ancestors did two-hundred years ago. This is very appealing to many people, from a wide cross-section of the nation. We know several millionaires who prefer camping to staying in fancy hotels. Have you ever camped? It is pretty enticing.
The bread-and-butter of RV parks is just that: Recreational Vehicles. The modern RV can cost up to and exceeding $1 million. This is a demanding customer who has a five-star hotel on wheels. You need to offer them what they want which is typically 1) a pull-through lot 2) good utilities 3) some fun things to do at the park 4) a clean and attractive physical plant and 5) a positive attitude of fun. If you don’t give them what they want, they will find it elsewhere. But, again, RVs come in every shape and size, and you should have a wide-selection of fun items to do, and not just croquet with Thurston Howell III.
A growing segment of the RV park industry is the “park-model” or “cabin”, which is basically a free-standing structure that is placed in the park and rented by the night. Some of these units are quite spectacular and others more basic. The key is that it allows those who want the RV park experience – but don’t own an RV or have a tent with them – to do so. And these things are not cheap, often costing $40,000 or so per unit to buy. In many cases they rent out for as much per night as a nice hotel – and stay full.
A successful RV park, like a good restaurant, should have a wide selection of options for every interest and budget. You are in the love of nature business, and the bonding business, and you should give customers an array of choices to enjoy those concepts.
Interesting Things To Do With Walls
Are the walls in your RV Park boring? Are they just masonry and paint? Many RV parks have lots of walls, but are not using them effectively. You can turn those boring walls into exciting visual points of interest, and it is not that expensive.
One option is to paint a mural on that wall. It can be a depiction of the RV Park or something interesting that happened nearby. Who can paint it? Consider having a contest at the local high school for a design, and then have the winner paint it on there. Or trade a local painter to paint the mural in a trade for some RV park time. You might even be able to do it yourself. Here’s an important tip to painting a mural. Most artists all cheat. They do NOT just draw the mural on the wall, They TRACE it. To do that, you have to buy a overhead projector (you can get these for under $100) and then project up your design at night and trace it on the wall. If you have it drawn properly, filling it in with paint is the easy part.
Vinyl printed mural
Another option is to have a vinyl printed with your design and then attach it to the building by outlining it with 2”x4”s and nailing it, or installing hooks in the wall and attaching with ratchets. You can get these type of vinyls printed for under $1 per square foot. One of the top vinyl printers is www.Formetco.com. Since this is full-color printing, your design should have no limitations. Photos are perfect, and the more colors the better.
Vinyl printed stock-on character
Even a small budget can afford a peel-and-stick vinyl character on that painted wall. It can be a person, or a cartoon character. There are literally thousands to choose from at such websites as www.Fathead.com. You can turn a boring wall into a cool story overnight with these simple additions. And custom printed ones are also available.
Boring walls have no place in an RV park. Turn your mundane wall space into exciting visual attractions for your property, at a very low cost.