All Forum Posts by: Kyle Robarts

Quote from @Mark Lawson:

Quote from @Annie Chen:

Quote from @Frank Rolfe:

RV parks are evaluated more like a regular business than most other real estate sectors. Take the last three years' Profit and Loss statements and average them together. Compare to the tax returns for some degree of confirmation. Apply a cap rate roughly 2 points higher than mobile home parks. In diligence, compare the prior annual revenue to the reality of electrical usage (come up with a constant of power cost per day per occupied space and then take the actual power bill and see roughly how many occupied units you have).

Much of RV park and mobile home park is 100% overlap: how to find them, negotiate them, do diligence on them, renegotiate them, finance them, turn them around and operate them. The big differences are that RV parks are typically amenity rich which requires more overhead, can be seasonal in nature (but not always), require a nearby destination to work well (as opposed to employers), and use values that are typically 2 points higher in cap rate. The same loan brokers that do MH also do RV, as do the insurance companies.

We own both, and the only benefit of an RV park is that -- if you find the right one -- you can ramp up revenue faster because it costs you nothing to fill a vacant lot. If mom and pop did poor marketing and you bring in professional-grade internet SEO and other methods you could theoretically double your revenue in one year without any additional cap-x. You could never do that with a mobile home park unless you can double the rents in one year (which would be world record). To fill a vacant mobile home park lot typically requires bringing in a home and selling it, while filling a vacant RV park lot simply means somebody pulls in their motorhome or travel trailer.

Think of RV parks more like owning a restaurant (and the hands-on management that entails) while owning a mobile home park is more like owning a parking lot that rents spaces out monthly and is much more passive in management.

Some people just prefer one business model over the other.

 Hi, Frank, if the seller only has one year of income and expense data, how can we figure out the right number to purchase? I am new to the RV park, What are the regular expenses per month?

 I have owned a lot of them and the first thing you need to determine is what type of park you are buying. As one of the other guys pointed out if it is a recreational park it operates a lot like a hotel and weather, time of year, ect need to be factored in but if it is long term park it is a lot like a MHP. I have some that are a mix but I like the long term parks better. 

There are around 1m people living in an RV full time and only about 600k long term pads in the US. Many of your recreational campgrounds are owned by the government (either state or local) and almost all of them do not allow you to stay more than 21 days so if you are running a long term park there is a very high demand in many states. 

Below is a sample P&L (it is a real P&L from one of our parks) that will give you an idea of overhead. Some parks bill for actual power use and have a separate power meter for each pad. Some just have one meter and they pay the power and if you go that route the utility cost is very high.  

Mark - how many pads is this if you don't mind me asking. If you're trying to project how much a bank will value your RV park for a refinance out of the construction loan to develop it, what should you take into account? Thanks!

@Roarke Van Brunt - thanks for the advice, very informative.

Had this issue a few times. My GC wants me to instruct other subbers (eg electrician, hvac, plumber) to clean up after their work. Is the burden on the GC to clean up after other subbers’ mess?

Investment Info:

Single-family residence fix & flip investment in Waco.

Purchase price: $70,000
Cash invested: $80,000

4/1 converting to 3/2
Full Rehab
Upgraded electricity, plumbing, added HVAC, new roof, all new walls, sub floor, flooring, opened up living/dining/kitchen into one large area ...

What made you interested in investing in this type of deal?

Initially wanted to BRRRR after a successful first project, but decided to flip after moving to real estate investing full time

How did you find this deal and how did you negotiate it?

MLS - negotiated thru a buyer's agent

How did you finance this deal?

Private Money Loan, HELOC and personal Cash for rehab

How did you add value to the deal?

4/1 converting to 3/2
Full Rehab
Upgraded electricity, plumbing, added HVAC, new roof, all new walls, sub floor, flooring, opened up living/dining/kitchen into one large area ...

What was the outcome?

Hope to list on the week of 9/20/21

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $78,000
Cash invested: $50,000

3/1 SFH, 1688 SQ Feet
Adding:
• HVAC
• New Roof
• Second Bathroom
• Interior Pain
• New Flooring in every room but living
• Minor floor leveling

Renovation completed April 2021.

Rented for $1,695/month

Appraised for $175,000

Refinanced loan was at 3.875 percent over 30 years - left only $6,000 in the deal ... Cash flow after CAPEX (20 percent), mortgage, taxes and insurance is at $275.00.

What made you interested in investing in this type of deal?

BRRRR - positive cashflow

How did you find this deal and how did you negotiate it?

Real Estate agent brought it to us based on our strategy

How did you finance this deal?

Private money loans, personal loans and HELOC for rehab.

How did you add value to the deal?

Converted 3/1 to 3/2. Renovated kitchen and original bathroom. New roof, new flooring, added HVAC.

What was the outcome?

Great BRRRR so far - I know they won't all be this easy.

Lessons learned? Challenges?

Staying on contractors until completion. The house seemed to look the same to me the final 3-4 weeks of renovation. Learning to be tougher and setting deadlines. Won't buy used appliances anymore have had two already go out.

@Matt Giordano for the reno, yes. @Tamantha Harris good luck!! @Sylvia Santelli based on comps, we think between $150K-$170K, concerned without garage we won't hit the top of that range ... @Logan Taylor thanks!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $78,000
Cash invested: $50,000

3/1 SFH, 1688 SQ Feet
Adding:
• HVAC
• New Roof
• Second Bathroom
• Interior Pain
• New Flooring in every room but living
• Minor floor leveling

What made you interested in investing in this type of deal?

Long Term Investment

How did you find this deal and how did you negotiate it?

Realtor brought off-market deal

How did you finance this deal?

Cash from personal investment, private lender & all Rehab through HELOC on primary residence

How did you add value to the deal?

Adding:
• HVAC
• New Roof
• Second Bathroom
• Interior Pain
• New Flooring in every room but living
• Minor floor leveling

Purchased first investment property and house has no garage. Weighing the risk/reward of paying for a carport. How much would a carport add to the value of an appraisal? Planning to BRRR.

That's awesome @Ben Rogers - thanks for sharing.

@Aaron Montague and @Steven Wilson thanks for the feedback. Do you have success on lenders for distressed properties on the front end?