HOW TO MAKE EVERY DAY A HOLIDAY WHEN YOU OWN AN RV PARK

Many people live out their lives without really enjoying their work. Then they retire and try to enjoy their final years, but really spend all their time fretting if their retirement savings will hold out. What if you could combine investing your savings with having the time of your life? Well, you can. And here’s how to do it.

Analyze how much working capital you have.
The first step to taking control of your life is to know what you have to work with. Take an inventory of all your assets. If you buy an RV park, you will live inside the park, so you can include the equity in your home in your calculations. Of this amount, you need to hold back a healthy portion for security – never put all your money into a down payment, as you need elbow room for emergencies and just peace of mind. If you have $100,000 in liquid assets, then you will only want to use maybe $50,000 of that as a down payment.

Learn everything you can about the RV park business.
Take a course through a website such as ours. Read everything available on the internet, including the many articles published on www.arvc.org — the national association or RV parks. Drive through the RV parks in your area and get a good feel as to if that type of thing interests you or not.

Start hitting RV park deals for sale and get familiar with the numbers.
You can find hundreds of RV parks for sale on such sites as www. Loopnet.com and www.RVParkStore.com. Take advantage of that, and become an expert on what the market rates are for return levels and price per lot. You will immediately note, through occupancy, what the “hot” and “cold” areas are for RV parks. You will also learn the difference from a “seasonal” RV park and a year-round RV park, and what a “destination” RV park is. Once you can guess at the value of a park through nothing more than its location and amenities, then you are ready to start making offers.

Make offers on many parks.
Buying an RV park is a volume business – you will have to make many offers. The point is to get a great buy, and you can’t buy low unless you ask for a low price. Don’t be afraid to have multiple deals going at one time. That’s what the experts do. When you find a deal that you feel very excited about and want to go forward, then you are ready to go to the contract phase.

Tie up the park under contract.
Don’t freak out when you put an RV park under contract. If you have used the right contract form (such as the one provided by www.RVParkStore.com), you will have the ability to cancel the deal for any reason during due diligence. You may put many parks under contract and drop them over time. This is perfectly natural. But you have to get off dead center and start tying them up to learn how to do it.

Perform great due diligence.
Great deals are made at the front end – if you buy it right, it will always be a winner. So make sure to analyze every inch of the deal. You will want to re-build your proposed income and expense statement yourself, without relying on the seller’s version. You can’t be too careful – there are plenty of unscrupulous sellers out there.

Get financing.
Obtaining financing can b e a challenge in today’s world. That’s why RV parks are so good – many sellers will offer to carry the financing for you, so you don’t have to make application to a bank. Just make sure that the length of the note is long – 7 to 10 years – so that you have time to find a real bank down the road.

Close on the deal and change your life.
Owning an RV park can be a great way to change your life for the better. Many people love to be their own boss, set their own schedule, and have many different things to do all day. And, as an RV park owner, you will find that you wear many hats. One of the key things that people enjoy about owning RV parks is getting to meet so many different people. If you like people, you’ll love RV parks. Every day are new guests, as well as fun current residents to talk to. And the more you like them, the more they feel that “love” and will want to return.

Conclusion.
Sure, it’s hard to break out of your comfort zone. But would you rather stay miserable? At least look into owning an RV park as a way to get you the quality of life you want. And when you buy one, be sure to invite all your miserable friends to come visit you – if they can ever get away from their boring 9 to 5 jobs!

By Frank Rolfe

Frank Rolfe has been an active investor in RV parks for nearly two decades. As a result of his large collection of RV and mobile home parks, he has amassed a virtual reference book of knowledge on what makes for a successful RV park investment, as well as the potential pitfalls that destroy many investors. www.RVParkUniversity.com.

Press Release: The Madison Group closes a $3.5M loan for the purchase of a RV Resort in Florida

Transaction Description: The Madison Group, a commercial loan consultant and broker, has provided the financing for the purchase of this well maintained Lakefront RV Resort. The park consists of 220 sites nightly and seasonal RV pads, with 26 long-term rental units. The resort was completely renovated approximately 15 years ago with all new infrastructures to include septic systems and city water lines. Amenities include a pool, laundry facility, playground, mini golf, general store, and restaurant. The Park is located on 16.5 acres with boat docks and ramps and the best bass fishing in the area.

Challenges: The varying income for the park made it difficult for traditional commercial real estate financing and impossible for an SBA loan. Also the park was located in a rural area and had a great deal of income from snowbirds. The park had suffered some lower income 3 years ago from an issue with the lake on the property which is the center point of their property. The new buyers, investment team, felt it had a great deal of upside to the park and is looking for a higher LTV loan to limit their investment in the property.

Solutions: The Madison group was able to source a lender that would provide financing on the rural park. A great deal of effort was spent reviewing the income for the park and analyzing how the future income would facilitate sufficient cash flow to service the debt. The borrowers were able to get a loan for $3,570,000, 75% LTV, with a rate of 5.5% fixed for 5 years. The loan adjusts after year five but is a fully amortizing loan for 30 years. This allows the investment group to review financing in year six but reduces their refinance risk.

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group and Jeff can be reached at 435-785-8350 or by emailing Jeff at Jeff.M@madisongroupfunding.com.

Safety Tips for Driving Your RV

Driving safely can mean the difference between life and death, so it’s imperative to learn and abide by the rules of the road. Whether you’re a less experienced driver or a senior who would like to brush up on the best ways to stay safe behind the wheel, there are many things to consider when driving your RV on your next road trip.

One of the first things you should do is get familiar with your vehicle. If your RV is new or if you don’t drive it that often, be sure to go over where everything is before you start your engine. Different models have different locations for the same button or switch, so familiarize yourself with where everything is.

Being prepared and comfortable with your RV is the first step. Read on for more tips on how to drive your campervan safely.

Minimize distractions

Safe driving is dependent on minimizing distractions. Playing music, talking to passengers, and looking at your phone may not seem that risky, but these actually are very dangerous activities because they take your attention away from the road. All it takes is a split second of inattention to put you and your passengers in danger.

Keep distractions at bay by preselecting a playlist to listen to for the drive, keeping passengers to a minimum (especially if you are an inexperienced RV driver), and putting your phone away the entire time you’re behind the wheel. If you know you’ll need to deal with important phone calls while you’re driving, set up a Bluetooth to connect your phone to your camper van’s stereo system, and put your phone in a dashboard holder to keep it closer to eye level.

Be patient

Slow drivers may wear on your patience, but it’s important to keep your wits about you, especially if the roads are wet or slick. Stay a safe distance behind the vehicle in front of you, especially if you’re on a curvy or two-lane road. If you’re on a tight schedule, leave early to give yourself enough of a cushion to arrive on time in case you run into traffic or get stuck behind someone who isn’t in as big of a hurry as you are.

Many people have at least one accident across the span of their lifetimes, and some have many more than that. Sometimes, an accident that doesn’t seem like that big a deal (such as a fender bender) can actually cause pain later. No matter how small an accident is, it’s always a good idea to get the other driver’s information and establish a timeline. If you start to feel pain in your neck or back, see a doctor right away because these injuries can cause chronic pain later in life. In fact, one study showed that people who have been involved in an accident are 84% more likely to develop chronic pain.

For more information on how an accident in your RV can contribute to health issues, read more here.

Keep your RV in good shape

It’s imperative to make sure your RV is in good condition before every trip. Check your tires, windshield wipers, and gas gauge before setting out. Make sure your windshield is clean, especially if you’re going to be driving with the sun in your eyes, because the bright sunlight on the horizon can really reduce visibility if your windshield is dirty. Get the oil changed regularly as well, and make sure fluids are topped off before you leave.

When venturing out on your next road trip, there are several things you can do to help you avoid getting in an accident in your RV. By familiarizing yourself with your vehicle, minimizing distractions, being patient, and keeping your RV in good condition, you can arrive at your destination safely.

Camping Checklist: 5 Camping Essentials

Are you ready to tackle the great outdoors? Getting away from the concrete jungle offers a world of benefits for your mind and body. Camping, and all the rustic charm and beauty that comes with it, can lower your stress improve your mood and reconnect you with nature. On top of that, the hauling and hiking will get your muscles moving in ways that a sedentary office job never has. Camping is a way to unplug from our technology addictions and live joyfully in the simplicity of nature.

With all that said, you can’t just throw a tent in the back of your car and go. Camping takes planning, problem solving and critical thinking. You have to ask yourself some important questions and do your research before you lace up those hiking boots and hit the trail.

Weather
You’ve circled the long weekend on your calendar weeks ago and the countdown is nearly at an end. When you chose this time of year, the weather could have been hot, mild, warm or cool — but that doesn’t mean nature kept up with the status quo. Check for rain, sun or other weather patterns just around the bend. If you’ve been planning to camp near a river or a stream, or your campsite requires you to hike across it, be sure to take a look at water levels. Most importantly, be sure to learn the weather forecast for morning, noon and night. Some of the best camping in the country, like Yosemite or the Grand Canyon, are known for having 20-30 degree fluctuations in a single day.

Cooking
When packing for a camping trip you have to think about a lot of contingencies. First, consider food. Will you be cooking over a campfire, grilling or surviving off granolas and apples? Once you decide how you’ll cook your food, you’ll know what you need to do ahead of time to make cooking a breeze.

(Speaking of cooking and breezes, you’ll need to consider how you can prevent wildfires on your camping trip. Wildfires are surprisingly easy to start and extremely dangerous. If you plan to cook over a campfire, you need have an effective way to put it out, like with sand or water, and don’t ever leave a campfire unattended or walk away from a stove or lantern that’s still hot.)

Location
You’ve been looking forward to hiking that Colorado peak to a crystal clear alpine lake for months. You’ve read blogs, flipped through books and talked with the experts at your local camping gear retailer. But if you think that your iPhone GPS will get you there, you’re in for a big shock. The more remote your trip, the more you’ll need to rely on other forms of orienteering, like maps and compasses.

Be sure to also research your intended campsite. Some sites will have potable water, grills and toilets, while others are more primitive. By reviewing the campsite, the drive and the hike, you can be ready for anything nature throws your way.

Safety
No matter where you’re camping, whether it’s in an RV near civilization or at the top of your state’s highest peak, safety should always be a concern. The first thing you should pack, and the quickest to get to, should be a well-stocked first-aid kit. Be sure to have an updated kit with bandages, antiseptic and ointment for the uncomfortably itchy plants that can irritate the skin.

It’s also important to know which kinds of wildlife live in the areas where you’ll be camping and how to make sure your campsite won’t attract them. Consider coolers that lock, heavy duty garbage bags hung high in the trees and clearing food from your site before turning in for the night.

Camping is a great experience. By It’s an escape from the craziness of our busy lives, with an opportunity to experience life in a simple, and incredible, way.

By James Strand

The Madison Group closes a $3.5M loan for the purchase of a RV Resort in Florida

Transaction Description: The Madison Group, a commercial loan consultant and broker, has provided the financing for the purchase of this well maintained Lakefront RV Resort. The park consists of 220 sites nightly and seasonal RV pads, with 26 long-term rental units. The resort was completely renovated approximately 15 years ago with all new infrastructures to include septic systems and city water lines. Amenities include a pool, laundry facility, playground, mini golf, general store, and restaurant. The Park is located on 16.5 acres with boat docks and ramps and the best bass fishing in the area.

Challenges: The varying income for the park made it difficult for traditional commercial real estate financing and impossible for an SBA loan. Also the park was located in a rural area and had a great deal of income from snowbirds. The park had suffered some lower income 3 years ago from an issue with the lake on the property which is the center point of their property. The new buyers, investment team, felt it had a great deal of upside to the park and is looking for a higher LTV loan to limit their investment in the property.

Solutions: The Madison group was able to source a lender that would provide financing on the rural park. A great deal of effort was spent reviewing the income for the park and analyzing how the future income would facilitate sufficient cash flow to service the debt. The borrowers were able to get a loan for $3,570,000, 75% LTV, with a rate of 5.5% fixed for 5 years. The loan adjusts after year five but is a fully amortizing loan for 30 years. This allows the investment group to review financing in year six but reduces their refinance risk.

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group and Jeff can be reached at 435-785-8350 or by emailing Jeff at Jeff.M@madisongroupfunding.com.

The Madison Group Arranges $910,000 Refinance Loan for a Mobile Home Park in CA

The Madison Group (TMG), a leading source of mobile home and RV park financing nationwide, arranged the $910,000 refinance of a Vintage RV Park in Borrego Springs CA. The client purchased the park one year ago, and wanted to restructure the loan from a quarterly adjustable into a longer fixed rate term. TMG secured the financing with a 15 year fixed term with a rate of 4.90% and a 30 year amortization at 65% LTV. The loan has no prepayment penalty.

This unique 77 pad RV park has an eclectic mix of vintage RVs is always fully occupied by tenants and has a long waiting list. The tenant mixe is 50% weekenders, 40% snowbirds, and 10% full time residents. Most of the leases are month to month. Borrego Springs is a small market with a population of 3500 residents.

TMG overcame several challenge of finding a lender that was willing to finance an RV Park in a rural community. The tenants are not typical for an RV park with very few full time tenants. The property performs more like a mobile home park for snowbirds than an actual RV park, which affects the type of financing that can be acquired.

“We found a credit union that liked the property and the operator. They offered him the opportunity to refinance his debt into a longer term fixed note and a 30 year amortization. No prepayment penalty on the loan and the increased cash flow will help with ability to purchase another park next year. He no longer has his properties tied up with cross collateralization which gives him more financial freedom” said Angela Kesselman, Associate Director of Finance.
A happy client commented: “I purchased an RV park just over a year ago and I had a terrible SBA loan that required liens on other properties and businesses. I’m not sure how I came across The Madison Group, but from the time I spoke with Angela on the phone the process was a seamless. Once Angela knew the loan would go through, she handed me over to her loan coordinator, Brandi. Now let me tell you, I’ve purchased or refinanced over 10 properties in the last 10 years and I’ve NEVER dealt with a loan coordinator with so much common sense and amazing communication. I plan on buying another RV park this year and hopefully the Madison Group can help me again. I would definitively recommend them to anyone looking for funding.”
The financing was arranged by Angela Kesselman at The Madison Group.
The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.
The Madison Group can be reached at 435-785-8350 or by emailing Angela at angela@madisongroupfunding.com.
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WHY RV PARKS HAVE A HIGHER RETURN THAN JUST MONEY

When it comes to investing, most people look only at the numbers. But RV park owners enjoy dividends that stretch beyond simple economics. They can gain personal rewards that are equally as impressive as their financial benefits. So why do RV parks have a higher return than just money?

THE CHANCE TO BE YOUR OWN BOSS

When you own an RV park, you own an interesting business that you fully control. You hold the title, and you call the shots. On top of that, you own a virtual city of customers, and you can delegate as you see fit, and test your theories with your own pocketbook. Since you own the business, you also receive all the rewards. You answer to no one and you make all the decisions entirely on your own.

THE CHANCE TO BE OUTDOORS

One huge benefit of owning an RV park is that you have the privilege to be outdoors – a lot. An RV park is an outdoor enterprise, and that communing with nature is a huge attraction for many buyers. If you have been stuck in an office your entire adult life, there is huge satisfaction in getting out of that rut and spending time in the sunshine and fresh air.

THE ABILITY TO ENJOY YOUR TIME AND NOT JUST WATCH THE CLOCK

Studies have shown that around 70% of Americans hate their jobs. They dread going in every morning, and they watch the clock the whole day, waiting for it to end. This situation has led to an enormous amount of stress in the workplace. An RV park can be the solution for many people, as it replaces that dreadful day job with something to look forward to – the ability to actually enjoy you time and your life.

A WIN/WIN WITH ZERO STRESS

One reason that owning an RV park can be such a pleasurable experience is because it’s a win/win business. In a correctly run RV park, both the owners and the customers are 100% happy. This is not a business founded on conflict. If you can make sure that all utilities and amenities are working fine and that all customers have a great experience on property, your success will be assured. Many jobs include a regular dose of stress, conflict, bitterness and bullying. This is not one of those jobs.

BUT GREAT FINANCIAL PERFORMANCE, TOO

If owning an RV park can be a pleasurable experience, then what about the economics? Can you have fun and make money, too? The answer is yes, if you buy the right park and buy it at the right price. The typical cap rate on an RV park is around 10% and, given current loan rates, provides for at least a 3 point spread between the cap rate and loan finance rate which, in turn, gives you a roughly 20% cash-on-cash return. But that’s only part of the story. The right RV park has significant upside to be tapped, typically in occupancy. If you improve the marketing and the customer experience – resulting in positive reviews, good word-of-mouth and high customer retention rates, you can typically beat the old owner’s revenue budget, and virtually 100% of that revenue falls to the bottom line.

CONCLUSION

RV parks offer high financial returns, but they also offer high levels of individual satisfaction, They are a unique investment class, as they have the ability to meet the investor’s needs in more categories than just yield.

Frank Rolfe has been an active investor in RV parks for nearly two decades. As a result of his large collection of RV and mobile home parks, he has amassed a virtual reference book of knowledge on what makes for a successful RV park investment, as well as the potential pitfalls that destroy many investors. www.RVParkUniversity.com.

IS BUYING A RV PARK WORTH THE INVESTMENT?

Do you enjoy people? Do you like being outdoors? Do you like being your own boss? If the answer is “no”, then buying an RV Park is the worst thing that you could do. If you answered “yes”, then read on and learn more about owning an RV Park.

THE FINANCIAL SIDE OF OWNING AN RV PARK.

RV parks are a very high-yielding investment, with returns from 10% to 20%+ on your money. RV parks are among the highest-yielding of all real estate asset classes. So if your goal is to maximize the return on your money, RV parks are not a bad starting spot.

Another strength to RV parks is the fact that most are owned by moms pops – smaller owners who have no debt and, therefore, the ability to carry the financing on the transaction. When the seller carries the financing at a low interest rate, it compounds the yield you can make on your money thanks to leverage. Leverage, as long as the interest rate on the loan is lower than the cap rate of the deal, will give you an even higher return. So, even if RV parks sold at the same return level as other forms of real estate, they would still kill the competition due to seller carry.

It’s also important to note that most seller carry is does not require any kind of credit review of loan committee. If you have bad credit, you can still pull off a seller carry loan. Most moms and pops do no type of loan scrutiny, and don’t even require some third party reports like an appraisal. Additionally, most seller carry is “non-recourse” in nature; even if you default on the loan and property is sold at a loss, they note holder cannot come after you for the deficiency.

THE NON-FINANCIAL SIDE OF RV PARK OWNERSHIP

To many owners, running an RV park is so much fun that they’d do it for free. While we don’t advocate that you go that far, the types of duties that owning an RV park include are very appealing.

Where else – outside of an RV park – can you devote your day to fun? And of all the duties that you inherit, they break down into three main categories:

* Giving people a wonderful experience away from home. Your customers are looking to you for guidance and support. They want to hear about things to do, things you recommend. They are your guests, and they need you to help show them where to go and how to hook up their utilities. Many just want a pleasant “how are you doing today” to re-assure them that they made the right choice in pulling into your RV park

* Fixing things on a continual basis in the out-of-doors. If you are a hands-on RV park owner, you will be forever tinkering with everything from the swimming pool to the landscape. You will be a jack-of-all-trades who needs to enjoy working with your hands outside. Even if you have a maintenance man and just ride around on a golf cart, you are always going to be multi-tasking.

* Being the boss. Every problem is going to stop with you. You have to be the decision maker. You’re the one who makes the call on if you can give a discount to the 10 snow-birds passing through as a group. You have to decide on the advertising. Everything is you, you, you. In being the boss, you also have complete freedom over your time. You set the schedule and the hours of operation.

One of the biggest non-financial benefits of owning an RV park is the quality of life upgrade. Many people love the lifestyle that owning an RV park affords. The freedom and the fun. Many RV park owners only have one regret – that they did not buy an RV park sooner.

SOME ADDITIONAL CONSIDERATIONS.

Owning an RV park can be a source of creating an estate for your heirs to enjoy. While many people fritter their savings away when they retire, an RV park owner can spend every last dime the park generates, and it just creates a new stream of cash flow the next day. So you are actually building an asset that may not only be your source of enjoyment, but provide for your heirs as well.

A successful RV park can be worth $1 million or more. It can be a multi-generational gift to many people. A way for you to create an important estate on only your down-payment and sweat equity.

CONCLUSION

Owning an RV park is well worth the investment. It can provide financial and quality of life benefits that far outreach any stock, bond, CD or other form of real estate.

Isn’t it worth the time to research the RV park industry more? But don’t call me – I’ll be out on my golf cart.

Frank Rolfe has been an active investor in RV parks for nearly two decades. As a result of his large collection of RV and mobile home parks, he has amassed a virtual reference book of knowledge on what makes for a successful RV park investment, as well as the potential pitfalls that destroy many investors. www.RVParkUniversity.com

HOW TO BUY A RV PARK

With 10,000 baby boomers retiring per day, there has never been more demand for RVs and the retirement lifestyle of traveling America in an RV. And with more RVs on the road (currently over 8 million of them), they all have to have a place to park for the night – or head for a destination. Many Americans are taking advantage of this demand by buying RV parks as an investment. But how do you successfully buy an RV park?

NORMALIZE THE NUMBERS

When looking at the financial statements for an RV park, it is important to “normalize” these numbers through averaging. Don’t buy an RV park based on one year’s revenue. Numbers can be flawed due to unseasonably cold or warm weather, or even because of local construction projects and the price of gasoline. You need to see several years of statements to get a true handle on how much the RV park can be expected to produce in income.

LOOK AT CURRENT PERFORMANCE

At the same time, you have to focus on the current numbers on the RV park. Declining revenue over several years can suggest that there are bigger problems ahead, while growing income means just the opposite trend. The most accurate reflection of reality for the RV park is what you have going on right now. So when you average the numbers, you are hoping that they support the current revenue, and that the current revenue is up from the prior year. Any other setting means that you need additional caution and probably a lower price for the property.

EVALUATE BASED ON A RATE OF RETURN

Even though RV parks can appear fun and attractive, it’s still all about the money. You can’t overpay for an RV park and have a happy ending. Before you being looking at RV parks to buy, you need to determine what rate of return works for your goals. If you say to yourself “I need a 20% cash-on-cash return to feel good about this investment”, then you know that you need to buy a park at a 10% cap rate with 80% leverage in the form of a loan. Your focus should always be on the math. Where many buyers screw up is that they buy based on scenic beauty or pride of ownership, and lose sight of the big picture, which is all about the money.

FACTOR IN CAPITAL IMPROVEMENTS

Remember that the total cost of a project is not only the initial price, but also the cost of the improvements. Some buyers forget this simple fact, and only calculate their rate of return on the original price of the RV park, not counting any improvements. We have seen cases in which the renovations to the RV park can cost as much as 50% of the total purchase price, which can reduce a perceived 10% cap rate down to 7% — which can make the entire RV park upside down on day one.

LEAVE ROOM FOR ERROR

Things happen. You need to always be ready for a rainy day. Don’t put too much down on any RV park deal – leave yourself some money in the bank. In addition, don’t cut your budget too tight. If the RV park can make $5,000 per month, don’t saddle it with a $4,999 per month payment. Remember the old saying “under-promise and over-deliver”, and put in a bunch of “padding” into every number you budget. That way, if your estimates were off – or the market dips temporarily — you’re still O.K.

PERFORM GREAT DUE DILIGENCE

Benjamin Franklin once said that “diligence is the mother of good luck” and that’s as true in RV parks as any other type of real estate. Don’t leave your investment to chance; increase your odds by performing good due diligence.

DON’T TAKE RISK WITHOUT SUFFICIENT REWARD

If a seller is wanting you to buy an RV park with poor financial information, or declining revenues, or it’s located in a sketchy area, or the survey shows it’s in a floodplain, then the price of the park just went down substantially. You have to be compensated for greater risk by higher return. Don’t let the seller try to convince you that the perceived problem is low-odds and not worth worrying about. Every risk is real and must be accompanied by a price concession. Another way to overcome troubled deals is by having the seller carry most – if not all – of the financing on the deal. That transfers the risk back on the seller, and insulates your potential loss if the deal goes bad. It’s been said that all bad deals can be fixed with zero-down seller carry, and that’s not far off.

CONCLUSION

RV parks can make excellent investments, but only if you use common sense and focus on the money. There are thousands of RV parks in the United States, so don’t stretch or rush to buy the first one you see. Mitigate risk and do great diligence – and stay completely focused on the rate of return – and you should be able to find the RV park of your dreams.

Frank Rolfe is a mobile home and RV park investor and owns over 100 parks with his partner Dave Reynolds. Frank also teaches about RV Park Investing through www.RVParkUniversity.com

How to Turn an RV Park into a Destination

Although RV users are not as susceptible to fuel prices as the average American, due to higher disposable income and more willingness to spend it on their RV trips, it still makes sense to make the guests that come into your RV park stay for more nights. Remember that one RV that stays for four days is the same cash flow as having four different RVs stay overnight. Indeed, one of the best ways to hedge your revenue risk is to have guests stay more nights before moving on. So how do you do it?

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