Help analyzing RV Park Deal

[Griff Whalen]

Hi BP fam,

I’m looking at my first potential RV park deal and I would really love some feedback on how the numbers look to any more experienced investors in this space.

Some details:

Asking: $650k cash. Open to seller financing with some down payment. Old mom and pop just looking to retire.

Cap rate 13%

Property:

45 lots

City sewer/water

New electrical upgrades

Wifi

Clubhouse w/ laundry (quarter), restroom/shower, and kitchen.

Completely gravel, a few paved lots

Clean, low maintenance

Location:

Rural Texas, small town (<5,500 pop)

Working class park, jobs for oil, border patrol, wind farm, etc. come and stay several months.

Best park around, no real competition.

Economy seems stable with those industries but not likely growing.

Owner describes vacancy as fluctuating, but based on oil and wind farm jobs, not seasonality. Never empty, often at full capacity.

We are really looking at this for long term cash flow, not really banking on any crazy appreciation.

I’d be very grateful for any and all feedback or suggestions!

-Griff

[Austin Neal]

@Griff Whalen Good price per site. City utilities are a plus. Your first park will consume a lot of time, so be prepared to be there often. Expense ratio on a park that size will probably be 55-60%, so be careful about assuming a 13% cap rate if stated expenses are lower than that. I’ve got a 65 site park in Johnson City that you might like to see before you buy your deal. It might help you to see it and some of the management there. I can meet you there if interested.