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Updated 8 months ago, 04/18/2024
Newbie with an interest in investing into RV parks
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!
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!
Quote from @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!
One other thing to consider is that SBA will finance RV parks and it’s a great way to get it done.
If you are looking to build one, I can help there also. Our company builds them.
@Gyn Samples an RV park is less of a real estate investment and more of a business investment. When you say "manage" I hope you mean move to the area and live on site. The best parks have active staff out there every day dealing with trash, lawns, pools, etc. You got some good advice above regarding finding agents and lenders. Now you need to do your homework on the areas in regards to zoning (are you building from scratch?), tourism, future development, etc. In my area, only certain types of parcels can be developed for that type of use. Some areas have expensive water and sewer tap fees and others are cheaper. A "good deal" might be too far from the highway or lack surrounding amenities that are appealing. Or they may be too crowded and unpleasant to drive big rigs through. What will make people want to choose your park over others?
Quote from @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!
Hi Jacob!
I appreciate the information; this give us a lot of insight and direction. Thank you!
Quote from @Mike Reynolds:
Quote from @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!
One other thing to consider is that SBA will finance RV parks and it’s a great way to get it done.
If you are looking to build one, I can help there also. Our company builds them.
Hi Mike!
Yes, I was actually thinking of looking into the SBA loan options. On those should I go through an SBA agent or find a real estate agent to help me navigate this type of funding? Or do I need both? I plan to figure it out at some point, but if you happen to know that would be great!
Quote from @Teri Feeney Styers:
@Gyn Samples an RV park is less of a real estate investment and more of a business investment. When you say "manage" I hope you mean move to the area and live on site. The best parks have active staff out there every day dealing with trash, lawns, pools, etc. You got some good advice above regarding finding agents and lenders. Now you need to do your homework on the areas in regards to zoning (are you building from scratch?), tourism, future development, etc. In my area, only certain types of parcels can be developed for that type of use. Some areas have expensive water and sewer tap fees and others are cheaper. A "good deal" might be too far from the highway or lack surrounding amenities that are appealing. Or they may be too crowded and unpleasant to drive big rigs through. What will make people want to choose your park over others?
Hi Teri!
Yes, we plan to move on site and manage the property. My partner is experienced in landscaping and maintenance for apartment complexes. I have experience in office/managing projects I'm sure there will be a learning curve, but one we believe we can accomplish. As far as what we are looking for... well (crossing fingers) we are hoping to find a mom & pop RV park that may need a good sprucing up that is in an area that attracts either workers, travelers or both. We are flexible in our RV park ideals but are looking around places that may attract long-term RVers. As for our personal experience in staying in RV park there are quite a few reasons why RVers will choose certain parks above others, but the biggest ones for us were easy to navigate and informational websites, advertising, good pricing and great reviews. Thank you for the thought-provoking questions!
Quote from @Gyn Samples:
Quote from @Mike Reynolds:
Quote from @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!
One other thing to consider is that SBA will finance RV parks and it’s a great way to get it done.
If you are looking to build one, I can help there also. Our company builds them.
Hi Mike!
Yes, I was actually thinking of looking into the SBA loan options. On those should I go through an SBA agent or find a real estate agent to help me navigate this type of funding? Or do I need both? I plan to figure it out at some point, but if you happen to know that would be great!
I use a broker that specializes in SBA funding.