Newbie with an interest in investing into RV parks

[Gyn Samples]

Hello BP community! My partner and I are looking to invest in a RV park. We have experience in traveling around the Western USA in our RV and have stayed in various RV parks along the way. With our backgrounds and experiences we feel confident that we could manage an RV park, but we have no experience in real estate investing or buying properties in general. Any advice would be helpful! We are currently looking into finding an agent, but we have some questions.

1. We are looking to buy in East/Central Texas, but live in West Texas. We assume we need to find an agent that lives in the area we are looking for, but can the same agent help us look in other areas or do we need to find a different agent for that area?

2. Will an agent help us get pre-approved/find funding or do we need to figure that out on our own?

Thank you all in advance!

[Jacob St. Martin]

Hello Gyn, 

Congrats on taking the first steps to buying an RV park! 

1. You definitely want an agent who is located in the area that you want to buy. If you find an absolute rockstar agent they may be able to help you look in other areas but you are going to be better contacting an agent in each area that you are looking. Additionally, you need an agent who specifies in this type of asset. A residential agent is not going to be useful for you here. 

2. A good agent should be able to walk you through the types of lending for this type of asset and who guide you to who they typically work with. It doesn't hurt to do some research on your own though. For this type of property you are going to find that the lending terms aren't going to change a ton from place to place. It is going to be a DSCR loan (debt service coverage ratio). This means that they are going to look at the ratio of the Net Operating Income (NOI, or income - expenses) divided by the monthly debt service (your monthly payment). They want this ration to be 1.1 or higher typically. They will probably only lend 65-70% of the purchase price but this will depend on the lender.

If you have more questions feel free to reach out via a private message!