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Updated over 8 years ago on . Most recent reply
RV park/hotel/mobile home park
So I moved to a different part of Missouri for my job and the area is surrounded by spring fed creeks so canoeing and floating are huge attractions. I have found a 16 space RV park with 20 mobile home slots, a live in 3br/2ba home, 10 bedroom hotel w/ laundry facility and last but not least it comes with 20 canoe and kayaks for guest rental. I can remodel/fix up about anything so I feel the potential of this property is unlimited.
My question to you is how should I go about acquiring the property? Bring in a financial partner and fix up and maintain the property on my end, standard hard money, bank loan or another creative financing method?
I feel this property could be profitable but i'm not real familiar with financing for a property with this many aspects and moving parts. Please reply or PM me.
Most Popular Reply
Get a handle on the owner's books to see how well it performs, which will fully influence the value of the business and the offer you should make (if any).
Find out from the Seller if they are open to Owner Financing and if so what terms. Understand how much money you will need to spend fixing the issues with the property to get it operating the way you want. Combine this with your down payment and now you know how much cash you need to work the deal.
Budget your expenses to be about 50-60% for a property like this, maybe more if on private utilities. The Seller's books may show they have a 30% expense ratio, but don't let their under-spending to properly maintain the property guide you. Estimate expenses based on how you will run the property.
With revenue in hand, expenses covered, and cash needed, you can now formulate an offer that will let you cover all of this and the debt service.
If you plan to get conventional financing and the loan is less than 500K you will need to approach a small / local bank. Get two years of tax returns and as much data from the Seller you can to support it. Without this and your personal guarantee they will not make the loan.
Good luck!