Need Help Evaluating a Vacation "Resort" or RV Park

[Kathryn Bowden]

We are interested in buying a 2.8 acre property with two existing park models, two full hook-ups (which used to have park models) and space and permission for five more spaces (a total of nine allowed spaces), either RV or park model spaces per the county. One of the total nine spaces can have a permanent structure, i.e., manager's residence. It also has a small laundry/shower house that needs a little TLC. One of the PMs could use a new roof. There are also a few containers on the property. This property is somewhat long and skinny. It fronts a lake, more like inlet, but still pretty views for most the spaces. There is an easement for a lake front area that is owned by one of two other houses/properties at the end there (they have easement road to reach their property on this property), where you can fish, canoe, etc., with a couple of small docks. A beautiful large beach is also right down the road, .5 of a mile. This property is on the Pacific NW coast. They are asking $297,500 and it's been for sale for quite a while. It is being sold by an elderly couple who used to run a fairly bustling vacation rental business there years ago (according to them), but scaled it down as they got older. They sold off two of the park models (had removed), decided to live in one (they used to own one of the homes at the end but sold that too), and rented the second remaining PM to a full time resident for $650 per month. They are selling this place because of age, health and are moving back to be with their kids, they are 80 years old. They seem like very nice and honest folk. So as it stands now, the property only brings in $650 from the one PM, the second one could bring in more easily. However, we would want to give immediate notice to the one permanent resident and turn the entire place into a vacation rentals spot. Our plan is to use all park models, for higher dollar vacation rentals (which was what the couple used to do). How can I figure out what this place might be worth with what it's doing now, versus it's potential, and what we should be willing to pay for it. It has city water which is great (though it is officially just in the county), and a very large septic accommodating the entire place. So the basic infrastructure seems to be there. There are other details I could share, but won't try to spell out everything in this post. We thought of offering $225,000 cash, but figure they will probably balk at that. However, cannot imagine paying more than $250,000. And that wouldn't leave us much left for our development of our vision. Mainly we don't want to over pay what might be justified. They are very motivated, and have said they are near getting ready to just leave it and permanently rent out the PM they are now living in. What kind of return should we expect on our money versus the asking price, either now or the future potential. Do we figure it this way? Do we figure it as what is it worth as a 2.8 acre piece of land with some infrastructure on it and two older PMs? Or both? We want to be sure we have a good investment. We have run preliminary numbers and like the potential.

P.S.  I am reposting this in a different section in hopes of getting a reply.

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