One of the methods to find an RV park is to look at “online” listings –typically on RVparkstore.com or Loopnet.com. But there’s a lot you need to know about how to properly navigate this deal-finding platform. In this RV Park Mastery podcast we’re going to review the basics and give you some tips to be more successful in the online arena.
Episode 82: All About Online Listings Transcript
Amazon started in 1995, and the way we shop was forever changed, even for RV parks. This is Frank Rolfe, the RV Park Mastery podcast. We're gonna talk about trying to buy RV parks online. Now, there are four major food groups when it comes to finding an RV park to buy, you have real estate brokers, that's a really good one, and you've got cold calling, that's a good one. And then you have direct mail, that's a great one. Then you also have online. So what does online mean in the world of buying an RV park? It means you're gonna look at listings on a computer, on the internet of RV parks that are already established that they are for sale. And what's great about that is that you already know some things typically on an online listing, you know not only a little bit about the RV park, where it's located and its size, but also you have the price. Because unfortunately, on the other three options, we don't always know all the facts in the front end. Sometimes, for example, even on listings held by brokers, we have to sign an NDA or something to even get in the game to start looking at the facts and figures regarding the property. But in online they let it all hang out. Everything is pretty much there.
Some RV parks where you wanna get even greater depth into the financials will require you to sign some form of NDA, but the bottom line is you can scan through online listing very, very quickly to determine if any of those fit what you're looking for. And typically, they're organized in such a fashion that you can quickly see geographically where they're located at, you can see roughly the size of the deal, so you can navigate them pretty quickly. So what are the problems with online listings? What do you need to know if you wanna be an effective buyer of RV parks online? Well, one of the first things you have to know, is it the price that you see on the online listing is typically very, very high compared to what the typical market pricing is. Now, no one knows why that is exactly, but probably it's because when someone goes and puts a property out on the internet to a bunch of people, a bunch of strangers they don't know, they get much more bold about the pricing than if they were talking to you if you called them on the phone, so they throw out prices that they typically would be embarrassed to throw out because they know they're stupid, but yet there's no one out there that staring them in the eye, making them racked with guilt of throwing a crazy price up so they just kind of do it anyway.
Another problem you have with online listings on the pricing is that unlike situations where there's a broker involved, the broker contend to navigate them as to what values really are. If you have an RV park that clearly will not appraise it greater than a half a million dollars and you want a million and five, the broker is gonna tell you, "Look, I'm not going to go ahead and take the listing at that price because you'll never get it." So, often, those brokers tend to be a safety valve to people making crazy prices. But online, there is no broker, it's direct, it's just buyer to seller. And as a result, there's no one to tell them or instruct them or belittle them, if they wanna go out with some kind of crazy price to the marketplace. Now, what that means is since they're going out with a crazy price, what traditionally happens is they don't get it. So the first thing you really need to know about online listings is don't be embarrassed to make really low offers. How low? We watch a property in Springhill, Missouri, at 50% of the price on the listing that was online, and it was marked firm. So think of that, the seller is saying, "Here's my price, take it or leave it. This price is firm." "Well, but I'll give you half of that price." "Oh, okay, I'll take that."
So in the world of online listings, there really is no price that is firm, there's no price set in stone, they're very, very elastic. So don't think, "Well, I'm not going to call this seller because his price is far higher than I would pay." That price doesn't mean anything, you can almost ignore it, instead go to the seller and say, "Look, I run some numbers, I can't pay the price you're asking, but I would be a player more in this price range. What do you think of that?" And you may then be shocked when you see how far they will drop the price. If you ever watch a show Pawn Stars or American Pickers, which are great shows to learn about negotiation, I'm sure you've seen episodes where the person brings in the Roman coin that they think is worth $5000. And the Pawn Stars bringing the expert on coins who says, "Oh, I know this kind of coin, this kind of coin only sells for $400," the Pawn Star turns to the guy and says, "Look, I have to make a profit. I typically pay 50% of value, I'll give you $200 for the Roman coin." And the guy who was just moments earlier asking 5000 suddenly says, "Well, how about $250?" That's literally how the online listings often work, so you've got to make the offers, do not hold back on making the offers.
Also remember that online listings typically display how long it's been on the online service. As a result, you can see who's been sitting around for a while, and here's what typically happens, the seller throws the price out really, really high, they don't get it, and at some point in the movie they start to get desperate, they lose confidence in their price and in themselves, and they certainly are going to drop it. You have to be the first one to the door when they do that to get the deal, because one day when they decide, "Hey, I've had it out there in the marketplace for six months, I give up, I'll take the first reasonable offer I get." You need to be the first reasonable offer. It is also very important how you pitch it to the seller, don't do it in a coy fashion where, "Oh yeah, well, I see your price, but here's the best I do." No, do it more in an inclusive manner, tell them, "Here's how I derive the price." "Here's the underpinnings of where I come from on this price, tell me where I'm going wrong. Tell me how you're able to get more than I can, because I have to get an appraised or I'll have to get a bank loan. And none of that'll work."
Sellers tend to react more favorably when you include them in this, in the decision-making process, another item on online listings is typically they're chock-full of bad information. People try and spin reality constantly, both occasionally and operationally. So don't consider when they tell you that this property has an NOI of X, that X Is in any way true. You're gonna find in the financials, when you really get into it, that probably they're lying on a number of items, they're either lying directly because they're trying to mislead you, or they're lying 'cause they didn't know any better. And sometimes they self-manage and therefore they leave out such items as manager expands, maintenance mowing, because they were doing those things. Another common problem is property tax, which often they show is what it is currently, but of course, if you buy it at three times what it's assessed for, the tax would go up three times. So what do you really get with online listings, if we're saying the prices are wrong, and the information is typically wrong, when you go to rvparkstobuy.com or lieutenant.com and look at those listings, what does it mean? Well, at it means is it adds to your volume of deals to look at.
Typically you've got hundreds of deals at any given moment in the United States, in the world of RV parks that you could make offers on, and that's great, 'cause remember the buy an RV parks is all of that volume. I always recommend everyone, contact brokers, do some degree of direct mail, cold calling, and online listings, the mixture of those four will get you the highest number of deals to look at. The more deals you look at, the more successful you'll be. But when you look at those online listings, don't just disregard them immediately because you think that the price is wrong. When someone has something out there, it's a plea for help, they wanna sell it, but they didn't wanna sell, they wouldn't put it out there, but it's up to you to try and navigate getting that price to a more reasonable level, you would not believe how many deals over the years, which looked hopeless based on the price, it was being asked, that we were able to translate it into a successful deal simply by throwing it at our pricing, be inclusive with the seller and being reasonable in what we are describing to them as far as what the limitations are.
Many sellers only own one RV Park, therefore, are they only ever selling their whole lifetime, one RV Park, they really don't know what they're doing, without the guidance of a broker they often make lots and lots of errors. Understand that on the front end and realize that comes with the territory, but the great thing is there's so many different listings you can look at immediately that you can make offers on, and one of those may be a true success for you. This is Frank Rolfe, with RV Park Mastery podcast. Hope you enjoyed this. Talk to you again soon.