Warren Buffett once said “without passion you don’t have energy, and without energy you have nothing”. Do you really have the passion for buying an RV park? In this RV Park Mastery podcast we’re going to discuss what passion really is, how to harness it, why you can’t fake it successfully, and how most of the top RV park owners share similar passions.
Episode 42: Do You Really Have The Passion? Transcript
Warren Buffett once said, "Without passion, you don't have energy. Without energy, you have nothing." The bottom line is if you have RV parks, where's the passion?" This is Frank Rolfe, the RV Park Mastery Podcast. We're going to talk all about passion, about enthusiasm, about how to harness the energy from that, and why you simply can't fake it and succeed.
So what is there to be passionate about with an RV park? Why would you have any enthusiasm at all? Well, for most people, their key enthusiasm is financial freedom. That's really what's driving them. So if that's your passion, if you want to basically be your own boss, if you want to have control over your future and not worry about others controlling your future for you, then clearly having an RV park is one great way to get that income stream that allows you to either quit your day job, or at least have a fallback if your day job doesn't work out, and even if you love your day job to have this additional income stream allowing you to build a financial free nest egg that you can pass on to others, that you can use later on in life, whatever you'd like to do. So money is a key to a lot of people in passion with RV park, and that's perfectly fine. There's certainly nothing wrong with that passion.
I think it's also important to be though passionate about RV parks themselves. Now why would you be passionate about an RV park? Well, because you like the business model. You don't even have to own an RV or be someone who travels in an RV to appreciate and understand the model itself. And the reason the business model is so attractive to so many people is the low management of simply renting land. When you rent apartments, when you rent hotel rooms, you're responsible for lots of things, legally responsible, morally responsible. There's just all kinds of things you got to do. And for a lot of people they don't like all that worry.
Personally, I've never had any desire to own an apartment. I've owned a couple of small apartment buildings as part of properties that I've purchased and never really liked. It seemed that all the time I would get calls from people with problems. And I always had these horrible fears of what happened if I didn't get it fixed quickly enough. Hi, my doorknobs not working on my front door. I assumed that meant that next day, "Oh, I was robbed because your doorknob didn't work, and now I'm suing you." So RV parks basically because they're already on land, that's very attractive.
Also, the mindset of the customers. RV parks are typically considered more of a luxury item with more upscale customers and they're in a happy mode. It's a win-win business where you don't have to deal with lots of negative and unpleasant issues. They're there on vacation, great. They're there to have fun, super. They're not there to really whine and complain, they're not really there to threaten you or cause damage to your property. So that's another good reason to really appreciate the RV park business model.
Another reason is maybe you just really do have an interest in RVs. You think that you can create the ultimate RV park. Heck, maybe you want to live in the RV park yourself and self manage; a lot of RV park owners do that. So that may give you a third range of passion is that even beyond the income stream and even beyond your level of the business model itself you just love the industry. Nothing wrong with that at all. I've been personally passionate about every industry I've been in because I found it fascinating. I'm big into history, I've always seemed like nostalgic businesses, the history of them, where they came from. And so if that's you, well, then that's another great way to develop the passion.
Okay, so let's say you have the passion to buy an RV park. So how do you harness that passion? Well, the first way you harness the passion is, just as Warren Buffett said, passion equals energy, energy equals action. If you're really passionate about it, then you'll work hard at finding an RV park to buy. You have to cast a big net, you've got to talk to a lot of different people, lots of brokers, you may cold call or send direct mail to people. You may watch all the listings out there on RV Park Store and LoopNet. So the first way you harness that passion is to create action, to go out there and look for one.
Another way you harness the passion is if you really are interested, if you really have enthusiasm, that'll translate well into the seller, whether it's the mom and pop selling the RV park, or if it's the broker trying to find the perfect matchup of who would be ideal for this RV park. So they always tend to go towards the person with the most enthusiasm. Why? Because they know the person with the most enthusiasm is probably going to most likely close on the deal. In every deal there seems to always be that hurdle, that bump in the road, the person who's very passionate, very enthusiastic moves forward. When those who are not, they let their foot off the gas and hit the brake and drop out of the deal.
Also the same is true when you're going to get a lender. Lenders love people who are passionate about the projects they're trying to get a loan on, same as the seller. When they envision passion, they envision someone who's going to make sure that deal does not fail. They envision someone who's got a lot of action behind them. So when you seem very enthusiastic about it, well, they share your enthusiasm. They think, "Ah, okay, well, this person now here's someone I want to make a loan to, because I'm pretty confident they won't go bad because they seem to be so heavily into this."
Now, another way you harness your passion is through your action as the owner as far as operating the property. When you are excited about something, when you have enthusiasm, you're just more likely to show up at work, mentally and physically. Even if you're managing from far, far away, you will be a lot more attuned to what's going on, more eager to talk to the manager, more eager to see every day's revenues, when you have passionate enthusiasm for it. You ever notice with some of these moms or pops you buy from the one thing they're lacking, is that passion and enthusiasm? That's why often the RV park is selling for such a low amount. That's often being because it's not working well. They just don't care anymore. They just don't have the energy. You look back at photos, sometimes they have photos of the early days when they built it, and they're just all over it. They were so very excited then, so passionate. And that's one reason you'll see with some RV parks declining revenue. It declines every year as a lose some more of their enthusiasm. Just not a good situation to be in. So when you are enthusiastic, when you are passionate, you always have the energy to make the RV park flourish. That's just the way that it works.
So can you fake it? Can you can you fake passion and enthusiasm? And sadly, the answer is no you can't. You can try and give it lip service. You can say, "Oh, I'm really all about this deal. I'm so very excited about this deal." But if you're really not, it'll come through. It will come through in your body language, the way you talk, the way you see, the way you appear. And then you just won't have any energy at all to get anything done. So don't fake it. There's not everyone out there is cut out to be an RV park owner. Not everyone out there is cut out to own anything independently. They may be better off just sticking with what they know and enjoy, which may just be their day job. Or maybe just your standard old investments like stocks and bonds. If that's true, then I think you shouldn't buy an RV park because again, faking it just doesn't typically make it.
However, if you truly are enthusiastic and you are passionate about it, then that is a great initial building block. I have seen many people who got in the industry with almost no capital at all, nearly zero. My first property, Glen Haven Mobile Home and RV Park, $400,000 I bought it for $10,000 down with mom and pop carrying the note. Other deals I bought had as little as $5,000 down and some had zero down. Now the way you find those kinds of deals is with passion, with energy. So if you tried to get in the RV park business without a whole lot of money, the best way you can offset your lack of funds is with enthusiasm.
Because here's the deal: mom and Pop sellers typically are wanting to bond with the buyer. They're wanting to find somebody out there who feels as excited about the property as they do. And they often like to sell to people who remind them of themselves in an earlier time. When you have boundless energy and boundless enthusiasm, they're attracted to you like a magnet. Your odds of bonding with the seller is so much higher when you really, really care. I would think someone would be much more successful in the RV park industry if they had enthusiasm than if they had capital. I could see a mom and pop dude a zero down deal with you if you really blew their socks off with your passion, more than them wanting to do anything, even if the person is getting a bank loan who just has no energy at all.
Now what passions RV park owners all seem to share? They all seem to share some basic items. Number one, they love the idea of financial independence. RV park owners are known to be fairly independent people. They don't like to depend on others; they like to only depend on themselves. They also seem to be very enthusiastic about the business model. If you talk to RV park owners, one thing you'll hear from all of them is they really love that sector. They love that space. They feel very strongly on the brilliance of renting land and not structures. So that's important. And you'll also find that many RV park owners really are fascinated with the RV park industry and the RV industry itself. They may not own an RV, they may not travel in an RV, but they really are fascinated with the nostalgia of the model. They love how well the industry is doing. You've probably noticed that RV sales grow higher every year. That's because the industry is so perfectly positioned, even before COVID, and now after COVID even more so. People are more focused now than ever before on the great outdoors. They're more focused than ever before on friends and family, and positive activities, and positive experiences. So do you have the passion to buy an RV park? Well, hopefully you do. And if you do, I'm glad this RV Park Podcast Series is of benefit to you. This is Frank Rolfe. Talk to you again soon.