Rookie Podcast 102: $10M Profit On Her First Deal?! It’s Possible with Campground Investing

Rookie Podcast 102: $10M Profit On Her First Deal?! It’s Possible with Campground Investing

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Heather Blankenship was on a road trip from Florida to California, stopping at RV parks and campsites in between driving. She saw how busy these parks were and thought it would be interesting to own one. On her way back to the east coast, she ended up buying a campground in Tennessee for over three million dollars. She had no experience, no team, and no money. Now, that campground is worth over thirteen million dollars!

Although Heather was just 26 at the time, she was able to quickly adapt to the learning curve that the campground presented her. She grew her knowledge and skill set and now oversees around thirty million dollars in RV parks and campgrounds.

We talk about the many different streams of income that a campground or RV park owner can cash in on, how to score financing when buying commercial properties, what to look for in your due diligence phase, and how to underwrite these massive deals. For beginner investors, this can seem like a huge task, but Heather proves that even with no experience, you can put in the work to make massive financial leaps like she did.

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Listen to the Podcast Here

Read the Transcript Here

Ashley Kehr:
This is Real estate rookie episode 102.

Heather Blankenship:
That was successful because I didn’t know, I shouldn’t have been. I should have never asked for that loan. I shouldn’t have bought something I knew nothing about, but it’s worked out really well. It was, like I said, $3.2 million when I found it, and now that property is worth 13 million.

Ashley Kehr:
My name is Ashley Kehr and I am here with my co-host Tony Robinson. And today we had such a fun guest on, and very unique topic. If you guys listened last Wednesday on our episode, we had Kiersten on who talks about how she as a rookie set out to purchase a campground. Well, today we brought on Heather who in 10 years has owned an RV park and has purchased a couple more in what, Tony, the last four years-

Tony Robinson:
Four years.

Ashley Kehr:
… I believe it was. Yeah. And her story of how she got started is incredible. And you guys will feel so inspired by it. But then she goes on and just explains operations, due diligence, acquisition, everything, right? What am I forgetting? Financing.

Tony Robinson:
So, we had Brandon Turner on last week, the one and only Brandon Turner. And I dare say that this episode might be better than Brandon’s. As much as I love Brandon, like the value that she provided. And I think it’s because a lot of people don’t talk about RV parks and campgrounds as an asset class. And I know that after listening to today’s episode with Heather, so many rookies are going to be hunting for their first campground, because her story is phenomenal. Her business model is phenomenal. And I think it’s something that a lot of rookies can look to replicate.

Ashley Kehr:
Yeah, it’s been, I think, what was it, two weeks ago, maybe three weeks ago as the recording of this, that I put in an offer on a campground and it was down to me and one other person. There was actually an article in the newspaper that said, local investor versus LA and investor. And after watching Tony get so hyped up from this episode, I realized that he was the LA investor that actually got the deal. He said, no, it wasn’t, but next time it is going to be him after listening to this episode.

Tony Robinson:
Yeah. After listening in today’s, it will be me.

Ashley Kehr:
Yeah. So, let’s bring Heather onto the show. Heather, welcome to the show. Thank you so much for joining us today.

Heather Blankenship:
Thank you. I appreciate you having me.

Ashley Kehr:
To get started, tell us a little bit about yourself and how you got started in real estate investing.

Heather Blankenship:
Absolutely. So, 10 years ago, I was driving across the country in a camper from Florida to California, staying in all these different campgrounds. And I was like, Hey, it’s just renting parking spots. It’s not just renting parking spots. However, I started Google searching campgrounds for sale, campgrounds in my area, trying to figure out, Hey, is this something I could do? And I found one that was in bankruptcy. I called the bank, long story short and bought a campground before I got to California. So, by the time I was leaving California to head back to Tennessee, I had bought a property I’d never seen, and I knew nothing about real estate or investing at all. 10 years later, I own about 300 units and have RV parks, mobile home parks and section 8 multi-Family.

Ashley Kehr:
Okay. That is insane. So, you didn’t have any real estate background at all and you just jumped for it and buy a campground?

Heather Blankenship:
Yeah. That might be mildly impulsive.

Ashley Kehr:
Okay. I want to start with that. So, how did you even analyze the deal? How did you find it? What did that kind of look like?

Tony Robinson:
Before we answer that question, I guess, had you had any real estate investing experience before that first RV park, or was that the very first foray into real estate investing you had ever done?

Heather Blankenship:
Literally zero. I didn’t even know an RV park was real estate, or I didn’t know what the word analyze meant. It just seemed like a good idea.

Ashley Kehr:
Okay. So, yeah. Tell us from the beginning. So, you decide you want to do this. How did you find the park? How did you finance it? What did that first deal look like?

Heather Blankenship:
Yeah, so I started Google searching RV parks for sale, campgrounds for sale in my area. And I found this property that was next to Dollywood, which is our version in Disney World. Only we have [inaudible 00:04:21] instead of Mickey Mouse in Tennessee, which was an hour from where I lived. And it’s our tourist town. So, I thought, how could it go wrong? I mean, how could something next to the number one attraction in the area not do well? So, call the bank and they want $3.2 million. And they’re like, how much money do you have? I was 26 years old. It’s like, I don’t have any money. This was a different time in the market. It was after the market had collapsed. So, it was 2011. So, banks still had properties on their books, were willing to get rid of them in a different way than you can buy properties now.
So, they gave me a non-recourse loan. And for anybody that doesn’t know what that means, it’d be similar to, if you bought a house and you didn’t pay your mortgage and the bank was going to take that back, you’d file for bankruptcy or whatever the repercussions were. Non-recourse means you aren’t going to have any of those repercussions. And no money down, which you don’t hear of now. It was nothing but a huge blessing. And in Sam’s Elle’s book, who’s one of the largest owners in the mobile home park and RV park space. He talks about his first deal. And he says, “I was successful because I didn’t know I shouldn’t have been.” I should’ve never asked for that loan. I shouldn’t have bought something I knew nothing about, but it’s worked out really well. It was, like I said, $3.2 million when I found it, and now that property is worth 13 million. So, it allows me to pull money out and buy other assets.

Tony Robinson:
Can we break down a couple of things there, because that’s got to be I think one of the best, first deals I’ve ever heard of in my life. And in fact, I think one of the things that I say on the show pretty frequently is that your first deal isn’t going to be the one that generates a lot of wealth. But you are the exact opposite of that. I don’t think I’ve met anyone whose first deal turned into a $10 million like amount of equity.

Heather Blankenship:
Well, I think that’s because most people, they kind of tip toe in. They dip their toe in the water and they go buy like a $30,000 property, they’re going to flip. Or maybe they pick a duplex. So, there isn’t as much room to grow. And not that I did this on purpose, but that seems to be the difference. Is there was so much room for growth there, and so much potential with all the different ways that RV parks make money. It gave me endless possibilities.

Tony Robinson:
I want to drill down just a little bit. So, you had never had any real estate experience prior to this first deal. When you reached out to the bank, were they vetting you at all as a potential owner, like did you have to sell yourself to them for them to give you this $3 million loan? What did that conversation look like? Why did they say yes to you?

Heather Blankenship:
I have no idea. And the interesting part is my relationship with that bank now is what allows me, I have about $30 million in real estate at this point and my relationship with that local bank has made my career so to speak. Meaning, them trusting me with that property and performing. Now, pretty much anything I want to buy, I send them a text and I’m like, Hey, I want to buy this? And they just say, Okay, send me the info. Building those local relationships with lenders is so different than having those national level banking relationships where you’re just another number. I don’t think it would have been possible if it hadn’t have been that local bank that really needed somebody to take it over. They were trying to operate the property themselves, so I’m thinking they were betting on anything is better than the nothing we’re getting right now. And they didn’t have any other interests. And they had been operating the property themselves for over a year.

Ashley Kehr:
Wow. And I can imagine that is not typically what a bank wants. I mean, if they foreclose on a house, the house usually sits vacant or maybe there’s people living in there, but to have to actually operate a business. And I want to dive into that, as to you’re buying real estate, it’s a property, but this is actually a business. You have to have employees, you have to have things in place. Can you kind of dwell on that for us and kind of explain what the operations look like?

Heather Blankenship:
Yes. And so RV parks are pretty heavy on operation depending on what type of park you own. So, we should talk about how parks work a couple of different ways. Some of them are long-term parks. Like you might think of apartments and some of them are short term parks, like you might think of a resort. So, there’s apartment style RV parks, the operations aren’t quite as heady. So, it’s going to be similar to a mobile home park or an apartment style operation. However, if you have a short-term park, you’re running a resort, which is what my first property was. So, I have probably 17 employees at that property. So, learning to manage employees, schedule employees, payroll, office hours, reservations, a software. There’s like nine different streams of income at that property alone. So, it is a hustle for sure. You’re getting your butt kicked for about 10 months a year.

Ashley Kehr:
What are some of those different streams of income that are coming in from a campground? Last episode we actually talked to Kiersten who’s in search of her first RV park. And what are some ways that someone like her should be looking to generate other kinds of revenue stream from the park rather than just the lot rent?

Heather Blankenship:
Yeah. So, depending on the type of park that you have, where it’s located, you can typically capture your guests, like we talked about with the resort. So it’s going to be like somebody’s on vacation. So, they’re going to be able to rent golf carts. You don’t just have your parking spots for the RVs, you can rent the RVs themselves. Have five rental campers. In last year alone, they took in $140,000 and that was with some closures from COVID. Those costs me about $30,000 a piece. So, with a total investment of $150,000, your return is probably in a year if we hadn’t had COVID. So, those rental campers, you’ve got glamping tents. Glamping is a huge craze right now. So, that property has 15 glamping tents, there’s also rental cabins. So, there’s 21 cabins at that location. So, those are working just like an Airbnb might. They have an average day of three days, you do the turnover’s just like an Airbnb would. Then you’re going to have your camp store. The camp store brings in a ton of money with people buying souvenirs, snacks-

Ashley Kehr:
Firewood, marshmallows.

Heather Blankenship:
Firewood, ice, camping supplies, all the different things you can imagine. The camp store alone makes up my payroll because the camp store does so well. There’s, like you said, firewood and ice. You’ve got the laundry machines. You’re bringing in all the money from the quarters, from campers doing laundry. There’s a pizza kitchen, lots of RV parks have restaurants. It’s just endless, the ways to make money at a property like that.

Ashley Kehr:
I want to ask your opinion on something. So, where I live near Buffalo, we have snow. So, our season is shorter than most other states have camping. And what do you think about RV storage? So, maybe it’s a seasonal park and providing RV storage. Do you think that’s a good source of revenue to add into a campground?

Heather Blankenship:
Absolutely. There’s a park in Tennessee, a lady that’s on the board with me, and she brings in over $100,000 a year in RV storage. She has a couple acres on the side that aren’t developed and they store RVs there and she’s bringing in over $10,000.

Tony Robinson:
That is awesome And I think it shows just all the different ways that you can kind of monetize having a park like this. Now, Heather, I want to back it up just a little bit and kind of reset the stage here. So, you bought your first one back in 2011, so about 10 years ago. You said that you’re up to about $30 million and you said 300-ish units now, are those numbers correct?

Heather Blankenship:
Yes.

Tony Robinson:
So, you scaled a lot, right? So, obviously you’re doing something right, but I want to focus just a little bit more on that first deal. So, after you closed, right, you got this loan for three and a half million dollars, you’re 26 years old, you had never owned any investment real estate in your life. What does day one look like? How do you go about educating yourself on how to effectively operate such a big investment? Were there partners that you brought in? Was there some kind of like manual that the old owners left behind? What did that process look like? There was

Heather Blankenship:
There was no manual and no partners or anything. First it was a huge shock because like I had said, I knew nothing about real estate. So, day one, literally at the closing table, the electric companies calling saying, we’re about to turn the electricity off unless you bring us a $20,000 check. I’m like, what? We haven’t even closed yet. I can’t give you $20,000, we close in a couple hours. And they’re like, we’re turning it off now. And people were living there. So, they were all about to lose power unless I changed it into my name. And, oh my gosh, it’s $20,000. I’d never seen a $20,000 power bill before, as well as the payment back then was $18,000 a month. I was used to like $1,200. $18,000? So, the sticker shock of all the different bills that you get, because I didn’t get to build up to this from a duplex or a fourplex. There’s 131 sites there now. So, the bill for 131 units essentially was, oh my gosh, that was day one.

Tony Robinson:
So, how did you go about learning the ropes? Was it just you, did you have a partner? And just what did that educational learning curve look like for you?

Heather Blankenship:
There’s a whole lot of Googling, which there isn’t a ton of information as Ashley knows till her and I met on RV parks. And so it was a whole lot of guessing. I spent the first three months sleeping in the office floor trying to figure it out, because I didn’t want to give up a site and take the income. I knew a little bit about the idea of Google ad words and pay for clicks. So, I set up a website and started doing that. That helped a ton. That was probably the thing that got me started, was using Google ad words and pay for clicks. And just guessing, it was really trial and error for that first Year.

Tony Robinson:
Yeah, Heather, I think you’ve got a really important point that I don’t want the listeners to pass up on. You said you spent the first three months sleeping on the floor because you didn’t want to give up one of your sites. I think people who are listening, they’re going to get caught up on the fact that today you’re at 300 plus units, $30 million, but they’re going to glaze over the fact that you slept on the floor for three months to get this business up and running. And that’s the important point that I want people to understand.

Heather Blankenship:
I was pregnant with my first child. So, all the excuses of, I’m a mom, I’m having a baby. I don’t have time. I’ve had three kids by myself throughout this. All the people argues with me I didn’t birth to three kids alone. There was a husband at some point. But the three kids dragging them with me. I’m birthing a baby and carrying one on my hip running. There’s pictures everywhere of me on the phone, taking reservations, holding one kid with another one strapped to my back. You just figure it out and make it work.

Ashley Kehr:
Heather, were you working another job at this time or before you purchased? What was kind of your background before getting into the RV parks?

Heather Blankenship:
Literally nothing related. I went to college for supply chain management, which is nothing similar. And I worked for enterprise in there as a finance manager for a couple of years. That’s a really great job starting out. I didn’t realize along the way all the things I was learning about operating a business, but the way their management program works and different things. So, I definitely think I learned quite a bit there. But I knew nothing about real estate investing or operating a property.

Ashley Kehr:
Let’s talk about the first things that people should know if they’re interested after listening to Kiersten episode, and now your episode about diving into getting an RV park. What are some of the things they should think about or what they should know before they take this on? And then we can kind of move into analyzing it and doing due diligence to.

Heather Blankenship:
Absolutely. So, when you’re starting out, some of the important questions to ask yourself is how involved do I want to be? Same idea with buying any other type of asset. Are you going to manage this? Are you going to hire a manager? Are you going to have a management company? So, how involved you want to be is going to help you decide what type of park you want. And there’s quite a few different types of parks. Like you were talking about. If you’re living in the Northeast, those are going to be seasonal parks. They’re only open a certain number of months. So, those resort properties are going to be a whole lot more intensive and a whole lot more involved. And if you’re not willing to be involved and learn some of those ropes in the beginning, that would be a really tough property for you to start out with not knowing a lot about it. Or if you want a long-term park, which brings in great money, because you really are just renting parking spots like we talked about earlier.
So, that first step is to decide how involved you really want to be. Obviously, you’re going to need to pick a budget, because these properties aren’t going to cost you $100,000 or $200,000 or $300,000 like you might find a small multi family for. Most of them are going to be in the millions. Sometimes you’ll find an RV park for four or 500,000, but you’re really just creating a job for yourself when you buy a property that small, because there’s not enough money in there to be able to hire and pay somebody. So, your budget and what type of park you want. And then the type of location you’re looking for, so that you can narrow down to be able to look for this property. Narrowing it down to regions in the country.

Ashley Kehr:
That is such a good point about if you’re looking at a smaller property, knowing that you’re going to have to be more involved because you don’t have enough spots to cover the overhead of hiring employees. And I think that’s something we don’t really think about a lot as rookies. And that is a great point. So, thank for bringing that up.

Heather Blankenship:
Absolutely.

Ashley Kehr:
Yeah. So, then on to kind of analyzing the deal. We have the BiggerPockets Calculator reports, and this is actually why I first reached out to Heather because I needed a calculator to analyze this dealer. And go ahead, tell them what you told me.

Heather Blankenship:
RV parks are more of an art than a science. There are so many ingredients to put in. It would be very difficult to make a calculator. I’m sure it’s possible for someone who wants to send us a message and tell us they’re capable of that, but there are a lot of moving parts. And right now the industry is only 18% institutional. Meaning the rest of the industry is owned by mom and pops. So, many of them are writing things on paper. They don’t have reports, they don’t have data to give you. So, that’s going to be guessing. They’re putting a lot of money in their pocket in cash, so they can’t even prove some of that. And the decision you’re going to make on what you would pay for that is going to be an art. And so some of the first couple of things you’re going to want to ask for is some of them do have PNLs. So, their profit and loss statements.
So, you want to go over the last three years of this profit and loss statements, but mom and pop will report that like you’re the IRS. And they’re giving you all the information that they think is a tax deduction. And you want to make sure you’re talking to them about that and they’re taking that out. Pops brand new truck that they really need to operate the property is awesome and absolutely a tax deduction, but it’s not an expense that you would need. So, you’re going to want to know what those personal expenses are that they’ve got mixed in there that you can pull out when you’re trying to do your real numbers. So, that’s the first place I would start is with those profit and loss statements.

Ashley Kehr:
That’s a good point because I’ve seen it the other way too, is where they take too many things out that you might actually need too, but also to think about it that way. Okay. So, you’ve analyzed the deal, you make an offer. What do offers kind of look like right now offering on an RV park? Are you still finding a seller financing at all? When you go to a bank, are they requiring 25% down? Can you kind of give us an idea of that?

Heather Blankenship:
Sure. So, one of the first things to note that rookies might not be used to is, RV parks don’t typically have that standard state contract you might see when you’re working with a realtor, because this is going to be a commercial property. So, you’re going to want to write what’s called an LOI, a letter of intent. So, your offer is going to look very different than what you’re used to when you’re buying a single family home, or up to a fourplex. It’s a very different process. And they often sell on a cap rate, which I don’t know if we want to dive into cap rates. But essentially it’s your rate of return.
And so you can see campgrounds depending on the area they’re in getting as low as a five or 6% cap rate, and as high as a 12 or 14 for properties that aren’t that great and that needle a whole lot of capital expenses and have a whole lot of deferred maintenance. Typically we’re used to, in multi-family, things closing in 15 days, 30 days, but the market right now, they’re like we’re closing tomorrow. However, in an RV park space, you’re going to have a whole lot more due diligence. So, it is not uncommon to have a 60 to 90 day due diligence period where you’re digging up all that information you need to make sure that you’re going to buy that property.

Tony Robinson:
One more follow-up, Heather, on the actual analysis of the property. You put out a lot of good information, but I know like, say when you’re analyzing an apartment complex, not only are you looking at like the trailing 12 months of income and expenses, but you’re also trying to make some reasonable estimation of what you think the rents will be once you purchase it. How do you, when you’re looking at these RV parks, make your assumptions about what the rent will be once you take it over?

Heather Blankenship:
Absolutely. And so that’s a huge thing in the commercial industry is, people want you to buy on projected instead of on actuals. And making sure that you were buying on actual numbers and not projected could be a huge rookie mistake. Buying on those projected just means that they’re getting your growth, and you don’t want to give away that growth because that’s yours and what you’re going to work for, and possibly even put money in for capital expenses in order to get that growth. So, don’t let them sell you on that idea of projected. This projected numbers are great because they’re helping you see what the potential of the property is, but that’s your growth, not theirs. So, in order to choose numbers of what it could become, most campgrounds now have some form of website. Or you can go to the Good Sam website and see that the campgrounds exist, and call their phone number.
So, I call all of the parks in the area or use their website depending on which option I have, and see what their going rates are. I compare their amenities to what I plan on having, and then oftentimes you might have to compare another area. So, in multi-family we’re used to getting comps, and those comps are usually something in your surrounding area. RV parks don’t always have comparable properties in your surrounding area. So, if we keep talking about that first initial property that was in Pigeon Forge, Tennessee, nowadays, there’s plenty comps there. But back then, I might’ve had to search for somewhere else to find a comp. For example, Branson, Missouri would be a comparable market. So, I might find something in Branson, Missouri. So, when I’m looking at what rates are potentially charged, I’m also looking in comparable areas, not just my local area, if I don’t have an option. Does that make sense?

Tony Robinson:
Absolutely. No, thank you for breaking that down. I think because like you said, it’s important to know, not just how the property’s performance a day, but if you invest $100,000 in renovation, capital expenses, what kind of income that you expect once that’s done. This is an important factor to consider as well. So, love that breakdown.

Heather Blankenship:
Absolutely. Yeah.

Ashley Kehr:
Do you want to go on as to after you’ve purchased the property, what does the due diligence look like and how much time do you usually put into your contracts to allow for that due diligence period?

Heather Blankenship:
So, the due diligence period is going to depend heavily on the type of property it is. The more amenities and more money you’re paying for it, the more research you’re going to do. And if you’re lucky, they’re using a software, which I don’t know exactly what percentage of parks are using softwares now, but I would say 60 to 70%. A good percentage use a software. And this is for making the reservations for their income and expenses. So, you’re going to ask for reports like occupancy reports, average nights day, different types of data that’s going to help you analyze what you think the property can become. So, that’s gonna be part of your due diligence. Because you’re really gonna want to be proving to yourself that the property is worth the amount of money you’re paying. That’s what you’re looking for. Also one big thing with properties like this are the utilities.
So, if you aren’t buying city sewer, city water, you’re going to want to do some research on the utilities that the property has. You’re going to need different third-party studies done to get back and make sure those are in good shape. Because you could really mess up and buy something that has say a lift station or some kind of packaging plant for the sewage, and maybe it’s $400,000 to replace something like that. And that just wipes your business out. So, being really particular about those utilities is a big part of your due diligence, as well as calling the city and making sure they’re properly zoned and permitted. Now, don’t do that until you’re in due diligence because you could really screw the owner up. But making sure that they’ve got proper zoning and permitting for all of the sites that they’re selling you, there’s a whole lot of things are going through during that. It might even require some drawings from a local engineer. If you’re planning on an expansion or development that’s part of your offering price, you’re going to make sure you have all those ducks in a row before closing.

Tony Robinson:
Heather, did your due diligence on that first investment look like how you just explained it to them?

Heather Blankenship:
No, it doesn’t exist. Literally no due diligence.

Tony Robinson:
And I asked that question because you’re going through a lot of stuff that’s really, I think important for people to hear, but it might also be maybe intimidating to some of the rookies that are listening. And I only asked that question to point out that the first time, especially if you’re doing a deal, this big, right, where there’s millions on the price tag, it’s going to be kind of a complicated thing to get right. And I think if you’re a rookie and you do want to go after something this big, just kind of understand or maybe anticipate that you’re probably going to do some things wrong, and there’s probably going to be some mistakes made along the way. So, Heather, she’s 10 years in now. She’s got it really dialed in. So, I just wanna make sure the rookies aren’t feeling like oh my God, how am I going to do all these things right? It’s a gradual process and where you started 10 years ago, isn’t where you are today. There’s been a lot of growth in between.

Heather Blankenship:
That’s true. And a great thing to point out is there’s so many resources now that there weren’t back then like BiggerPockets, and YouTube and all these other people on the internet who are giving you information. And due diligence on commercial properties in general, you can usually find a checklist somewhere. I have checklists that you can use. So, you have access to free resources that you didn’t use to have. So, it makes it a little bit easier.

Ashley Kehr:
Yeah. Heather had introduced me to the ARVC, the American RV-

Heather Blankenship:
Association of RV Parks and Campgrounds. Yeah. I’m on their national board and I am tier of their YPs. So, they’re a big resource also.

Ashley Kehr:
Yeah. And I think it cost me $100 to sign up as an associate member, someone who’s looking to buy a park. And they had all these checklists too for due diligence and a ton of resources that they gave out too. It was very helpful.

Heather Blankenship:
Absolutely. So, you can Google and find that now. 10 years ago, I would’ve loved to have had something like that.

Ashley Kehr:
Yeah.

Tony Robinson:
So Heather, I want to talk a little bit about how you scaled, right? I think that’s one of the things that gets a lot of the rookies excited, is knowing that after you get that first deal, that there’s kind of this domino effect of more and more deals happening. So, how long after that first RV park did it take for you to get that second one?

Heather Blankenship:
It was a long time. Like I said, I didn’t know anything about real estate. I didn’t even know I had bought real estate. I was thinking I was buying a business. So, it was six years before I bought my next property. And one of the things that are really important about scaling with properties like these, is you have to have a great team. This isn’t the same as the long-term properties, where you and two or three people can pull it off. You need an awesome team to do something like this. There’s people for operations, there’s people for housekeeping, there’s people for maintenance, there’s people for all these categories that you might not necessarily have in multifamily. And having that solid team is make it or break it for you.

Tony Robinson:
So, you wait six years after the first purchase to get the second one. So, now we’re six years into your 10 year journey. So, it sounds like the last four years there was a lot of activity there. How many deals have you closed in the last four years?

Heather Blankenship:
Oh my gosh. I don’t even know how many deals it is, a lot, to get to where I’m at. So, four years ago I went through divorce and I have 100% custody of three kids. And part of going through divorce was this fuel for me to become the person that I wanted to be. As a woman, we grow up thinking that we’re supposed to run our household, and you take care of the kids and you take care of your husband. And these are like your priorities. And that was so wrong. You can do all of those things and just kick butt at whatever you choose also. And I think that was a big awakening for me. And I became a broker for RV parks all over the US and Canada after I got divorced. And I learned that I had bought real estate.
I was an expert in operations before that, and then I learned to analyze deals and how to get financing, and all these other things you need to know to be an investor. And so after I got that information mixed with operations, I was on fire with finding deals and evaluating deals, and finding things that I thought were great money. And I should know to have a balance, I have long-term RV parks also as well as short term RV parks. And those make me feel like I am more stable. There’s been three times throughout my tenure career that I felt like, oh my God, what am I going to do? And the first time was when the government had to shut down and the national parks closed.
And I’m next to the Smoky Mountain National park, which is the most visited national park in the country. So, I was thinking, what the heck is going to happen to my business? The second time was the Gatlinburg fires. The news was showing this apocalypse and everything is burning down, and people were just calling rapidly making cancellations. And the third time was COVID because people couldn’t travel. So, I had these freak out moments that made me realize I needed something that was a little more stable in my portfolio. And adding those long-term RV parks and some mobile home parks, which operates similarly has stabilized my portfolio, and makes me just a little bit less stressed.

Ashley Kehr:
I want to go back to your team. Well, first of all, that was a great point, as to diversifying your portfolio, for sure. Going back to your team though, how many employees do you have now, and how do you manage it all? I mean, you are on what, a 65 day road trip right now with your kids and that’s so awesome. So, how do you run your whole team?

Heather Blankenship:
Yeah. So, I have about 30 employees right now across all of the businesses. And about a year and a half ago, I made my mother my COO, and she is a task master. So, mixing my knowledge of the industry and investing with her task master skill, because I’m definitely not a task master, makes everything run a lot more smoothly. And then I have three other core employees that I want to point out are people who I would not have hired in a normal scenario, and they are huge contributors to my business. My maintenance manager is a guy that was living in a tent and came to me on 4th of July weekend. All of my housekeepers had quit because I was pregnant and it made them mad. He comes in and he’s like, I need a job. I’m like, if you can clean, you can start now.
And if it had been any other day, I would have run a background check and all these different things. And not knowing that he was living in a tent straight out of prison for the second time, and I wouldn’t have hired him. But now he is a fabulous maintenance manager and this was seven years ago, I believe, that I hired him. And I would be in trouble without him. He’s fabulous. I have a property manager, she’s kind of the head of the property. So, she’s specifically at one property, but oversees everything generally in same deal. She’s the same age as I am, only she has kids that are 20 years old because she had her first child at 14, and she just hadn’t had someone give her a chance before. And she is killing it and doing an awesome job. Without that team, I wouldn’t be able to do the things that I do.

Tony Robinson:
That is such an inspiring story. I think what I love most so far, Heather, is that you’re kind of using your parks to make an impact on people as well, right? And I think that’s one of the really cool parts about being an entrepreneur is that you get to see, and you get to be a part of the change in a lot of people’s lives. It’s like we hire cleaners in different markets and we pay our cleaners a living wage, right? Like they’re able to kind of be their own entrepreneurs because of the funds that we pay them. So, it’s always cool to remember that part of being a real estate investor, part of being an entrepreneur is giving back to the people that work with you. So, kudos to you for being that source for somebody else.

Heather Blankenship:
It’s interesting that you point that out. Some of my latest projects are really passionate about teaching women to be financially free. Like we talked about, in our world sometimes women can get hung up on that wanting to find a prince when you watch Disney movies. My little girls do it now. And learning to be financially free and stable on your own is so important and so empowering. And the way that you feel about yourself when you’re able to support yourself as undescribable. So, teaching other people to do that is what makes me happy now.

Tony Robinson:
Yeah. It sounds like you’re doing a great job, Heather, so kudos to you for that one. I want to talk a little bit about the financing. So, your very first deal sounds like you kind of struck gold, right? You got this non-recourse loan as a brand new, unexperienced real estate investor. For your subsequent deals, how have you financed those? Have they all been with the same non-recourse debts? Are you bringing in partners to help finance some of these? Is it all just you? Walk us through what those transactions have been like.

Heather Blankenship:
So, that’s the interesting thing about RV parks is, like we talked about, they’re not going to be those smaller price points. So, you definitely need more money down. I believe Ashley asked this earlier. It might’ve been you Tony. Talking about what a bank’s looking for. So, if you go to a traditional lender, they’re going to want 20 to 30% down on this asset class. And that can be a whole lot of money. So, I don’t buy properties now that are not burst. So, it’s the same burst strategy that you would use on a house or a multi-family, I’m buying distressed properties. Most of them have operational things that are wrong, implementing a great software, building your team up, having other income streams, and then within a year, pulling that money back out to buy the next property. So, I’m doing that whether it’s an RV park or a multifamily, and that gives me the money to move to the next project.
For people who don’t have that ability, there’s lots of partners that you can find who are interested in this space. Obviously, you could save your money, but that might take a little bit. You can find investors. Ashley asked earlier, you can definitely find owner financing. Like we talked about, a lot of these properties are still mom and pop owned and they liked that steady stream of income. Getting that payment. Sometimes you’re still going to need a little bit of bank financing mixed with that, but you can usually mix owner financing and bank financing together to make those deals work.

Ashley Kehr:
Let’s touch on that a little bit, because I don’t know, Tony, if we’ve ever talked about that. And that’s something that’s common on the commercial side, is doing a mix of commercial financing and seller financing. Have you done a deal like that at all, Heather?

Heather Blankenship:
I have. And not all commercial lenders are willing to do that or not all banks are willing to make that type of loan. So, you have to find the right lender who will allow you to do that combination because they’re not all willing.

Ashley Kehr:
And I think the important thing is to tell the bank upfront that you are going to be doing a little bit of financing.

Heather Blankenship:
Absolutely.

Ashley Kehr:
Yeah. So, be upfront and then what they do is basically they just run the numbers and make sure that the cashflow can still support the bank’s loan payment and the seller financing loan payment, and the other expenses are still covered.

Heather Blankenship:
Exactly. And that’s when it’s going to be important to like Tony was talking about earlier, you need those projections and future numbers with data on what you can bring in, for the bank to agree to something like that. So, this is going to require more of a business plan than you might need in a normal multifamily property, because they’re going to want to see something that’s doing what you’re trying to do, and that it’s possible and could be successful.

Tony Robinson:
One more followup on the financing piece, Heather. So, it seems like the way that you’ve structured these deals that, are you the only owner in each of these parts like your LLC?

Heather Blankenship:
I am, yes.

Tony Robinson:
That is awesome. Like Ash and I talk about this a lot about how to leverage partnerships in a smart way, and sometimes having too many partners, there’s a big obligation there, right? So, to be able to scale to this size portfolio with no partners is a huge, huge accomplishment. And I love that you’re applying the burst strategy, which a lot of the rookies are already familiar with, but on a much larger, larger scale. And it just proves that there’s so many different ways to get creative in the world of real estate investing.

Heather Blankenship:
It’s interesting you say that. Because most people, once you get to a certain level, or even when you start off, they have partners. And where I had done that first deal without any outside investors or partners. And I should mention that obviously I was married then, we talked about that earlier. So, when I went through divorce, I had to buy my ex-husband out. So, in theory, he was kind of like a partner in the beginning. And when we got divorced, I bought him out. And so when I was going through that divorce, I met another investor at a meetup and he said, “You know Heather, picking a partner’s really tough. And when it doesn’t work out, it’s kind of like getting a divorce.” Since I was in that phase of life, I thought there was no freaking way I’m having a partner. That’s what getting rid of a partnership look like and I’m pretty sure that’s stuck with me and how I ended up where I am in that situation.

Ashley Kehr:
I like to joke that it would be easier for me to divorce my husband than it would to divorce my real estate partners. Yeah.

Heather Blankenship:
Exactly. You see people and they’re like, oh, I met this person last week and we’re going to do a deal together. You’re like, oh, I don’t think that’s a good idea.

Tony Robinson:
Yeah. So many good things you touched on, Heather, but one of the things I want to focus on and it’s in relation to your ability to scale, you talked about the team, you talked about the financing. Are there any other systems, software tools that you have in place that have allowed you to kind of scale effectively? Y

Heather Blankenship:
Yeah. There’s two things that come to mind with that. I use a software called Campspot to operate my RV park, and it is awesome. So, that affects scaling as well as the income that I’m bringing in. There weren’t really sophisticated softwares for RV parks until a couple of years ago, and that was a game changer. I don’t know how deep you want to get in this hole, but it has dynamic pricing. It has rate optimization, it optimizes your occupancy and does all these really cool things that we used to have to do manually. When I switched to that software, my income increased by 50%. So, that was a huge game changer for our industry, having that sophisticated software. The reports that that software produces allows me to scale better because I can keep up with the operations a whole lot quicker than having to manually figure all those numbers out.
So, figuring out how to find RV parks that are for sale. I get this questions all the time, because it’s not the same as just finding your real estate agent that’s used to dealing with investment properties and they start sending you all these deals. So, there aren’t as great of options for that. There are some niche specific brokers, however, mom and pop don’t always like that. And so you’re going to have to start cold calling and really getting aggressive with reaching out to people. So, you’re going to be doing direct mail and cold calling those specific owners. So, figuring out how to get good at that is what has helped me scale. And them knowing that I’m one of them has really helped. After you get that first property under your belt and telling them about that, they kind of loosen up and open up to you because you’re not really that an outsider anymore because they get so many calls. I hope that makes sense.

Ashley Kehr:
Yeah. I think that does. Making that connection, that relationship with them and especially telling them your story as to how you got started. I’m sure there are several that can relate to that, but also it almost makes you look as you started out as the mom and pop kind of purchaser, and then you kind of scaled and grew it into the business it is today. It makes it very relatable.

Heather Blankenship:
And a lot of them love their properties and they don’t want to see them become something else. And knowing that you’re already an RV park owner, they feel comfortable with the idea that you’re going to improve their property and take care of their customers that some of them have had for 20, 30 years.

Ashley Kehr:
Okay. So, thank you so much, Heather, for all of that information. I’ve been dying to do this episode with you. So, we’re going to kind of move into our segments now. So, our first segment is our mindset segment, and we want to know what was something you thought before you got started in real estate investing, and now you have completely had this big mindset shift about. It could have to do with investing. It could have to do with running a business, anything that has given you a total mindset shift.

Heather Blankenship:
I thought that you had to know everything. You needed all the details, you needed all the ingredients, kind of like making cake. You had to have all these ingredients that you add for the cake to come out perfect, or it’s going to fall and no one’s going to eat it. And the big point in real estate, and I hear professionals say this all the time, just get started. That’s the biggest thing. Is just get started. You don’t need all of those ingredients. Getting on the board is the most important.

Tony Robinson:
So, I’ll take us into our next segment here, Heather, which is our a random question. So, I’ll go first. And mine for you is, are you leveraging Airbnb for any of your short term parks?

Heather Blankenship:
Actually, I’m not. Surprisingly, with the software that I’m using, I don’t need it. So, it’s been really great to not have to give that percentage away or fee away that you give to Airbnb, and you deal with that other person that’s giving you some rules and guidelines. The software that I use in having the websites for the RV parks, I’m already capturing that audience and don’t need the Airbnb.

Tony Robinson:
So, it’s all direct bookings on your own websites. Wow.

Heather Blankenship:
Yes.

Tony Robinson:
You’ve got a great business model, Heather. No partners, no Airbnb, you’re like this one person show. I love it.

Heather Blankenship:
Thanks. Yeah.

Ashley Kehr:
Tony is like the opposite of you.

Tony Robinson:
Yeah.

Ashley Kehr:
He has a ton of partners.

Tony Robinson:
Year, Airbnb, Vrbo. It’s like, man, I got to change the business model a little bit.

Heather Blankenship:
But you know what, that all makes money. That’s the biggest thing, is you hear all these people on the internet and they’re like, you got to do this. You got to do that. My way is the best. But the huge testament to what Ashley just said is there are a hundreds of ways to make money in real estate. It doesn’t matter.

Ashley Kehr:
Okay. For my random question, I actually have two. The first one is how do you communicate with your team? How are you staying in touch? Are you guys using a type of software or are you guys just texting each other? Do you have weekly meetings? How do you keep your pulse on everything that is going on?

Heather Blankenship:
So, I suck at tech and my marketing team hates me for it. And they’re like, you need to use Slack. I’m like, I’m not using that. What’s that? So, we have group texts for everything. So, my phone, I can look away for like 20 minutes and go back and I have like 120 text messages, because I have all these different group texts for all my different teams. That’s also because I have quite a few employees that are older. They’re not necessarily 20 year old spring chickens that can use all of this stuff. Some of them don’t even have iPhones. And so doing those group texts is the easiest.
We were talking about different types of employees do help. The employee I’ve had the longest can’t read. He is awesome at maintenance, but he can’t even read. So, some of these software options would not work. So, for work orders, we’ll use sticky notes and they work awesome. They come to the office, they get their sticky note for their work order. They put their out time, they go to the project, they come back with their in time. And that sticky note is in that, we’ve done this project list. So, these are not sophisticated systems, but they work for us. Those group texts are what we’re doing right now. Yeah.

Ashley Kehr:
Yeah. And I think sometimes you can start to, over-complicate simple things like that, where a group text can work. Where you don’t have to go and use project management software and build out all of these systems to actually run a team that you can start out and continue to run using simple technology that’s out there today. Especially I get caught up a lot of times as to, okay, the next software I need to be using and building out or the next app or something like that.

Heather Blankenship:
And communicating with some of these people isn’t necessarily the same as making a project list when you’re remodeling a property. It’s not that sophisticated. So, when you have your activities team, that’s doing activities at a property. They’ve got their book of what they’re doing for the day and they’re getting their projects ready, and you don’t need something that sophisticated.

Ashley Kehr:
My second question, I guess, for the random one is, what markets are you currently looking at right now to purchase a campground? And what is kind of your buying criteria? Are you looking for a certain size, a certain cap rate?

Heather Blankenship:
Yeah, so I buy in Tennessee, Florida, and I’ve been looking at Texas. I don’t know that I’m going to get in the Texas market yet. We were talking about different property types. Texas has a ton of man camps, which is a whole nother subject for RV parks. But you evaluate those dramatically different than you do any other type of RV parks. So, all the things I’ve seen lately in Texas that seemed like a good deal, have all been man camps.

Ashley Kehr:
What is the man camp? I’m just like picturing a hunting camp, I guess.

Heather Blankenship:
No, a man camp would be if like there were oil workers or like new factory going in. And they all live there for a couple of years and the property’s bringing in a ton of money, because whatever this is, is in town for a few years. But maybe three years from now, there’ll be nothing there and the property is worth land value.

Tony Robinson:
That is a very different definition than what I was thinking. I was thinking there’s like a bunch of flat-screen TVs and like six packs of beer with like sports on at all times. But that sounds like a good-

Heather Blankenship:
There could be that too. There could be that too. But they’re just living [crosstalk 00:46:46].

Ashley Kehr:
I was thinking hunting camp because I have a friend that lives in Texas and he went like to a hunting ranch and I was, oh, maybe they have cabins and stuff or [crosstalk 00:46:55].

Heather Blankenship:
No, the hunting ranch would be awesome. Yeah. That’d be enough investment.

Ashley Kehr:
Yeah, there we go. We’ll partner on that, Heather.

Heather Blankenship:
Yes.

Ashley Kehr:
We’ll do a hunting ranch.

Heather Blankenship:
That’s what we need to do. That’s what we need to do. As far as cap rates go, we talked about those being more of an art than a science. And so I’m not really focused on a cap rate like some people do, you’ll hear some less seasoned investors that get really focused on that cap rate. But when you start digging in and you see what’s in their numbers, what’s not in their numbers, what should be in their numbers. You can now look at that cap rate and make some different decisions. Learning how to make each investment a good deal. When I’m looking at these properties, I’m thinking about, what would make this a good deal on every that I see. And if I can make that work, the cap rate’s not really relevant.

Tony Robinson:
I love that approach, right? I think a lot of times new investors, they get stuck on certain numbers. But what you’re saying is, as long as at the end of the day, the return that I’m getting as the owner meets whatever requirements I have, I’m not as concerned about the DSCR, or I’m not as concerned about the cap rate, or I’m not as concerned about the NOI. It’s like, what is the actual dollar amount of funds that’s coming back into my pocket? So, man, love that, Heather. You dropped so much knowledge throughout this episode. I’ve never thought about buying a campground, but I might end up doing that at some point this year. We’ll see. And in my mind I’m thinking like, how can I take this and turn it into some kind of like short term rental and put it on Airbnb or something like that? So, we’ll see. We’ll see.

Heather Blankenship:
But you don’t need to-

Ashley Kehr:
You don’t need to.

Heather Blankenship:
You just build up the website that Heather did.

Tony Robinson:
Just build my own website.

Ashley Kehr:
Yeah.

Heather Blankenship:
Exactly.

Ashley Kehr:
Joshua tree campground coming 2022. I already see it.

Heather Blankenship:
So freaking hot.

Ashley Kehr:
Heather, thank you so much for joining us. Can you tell everyone where they can find out some more information about you and possibly reach out to you?

Heather Blankenship:
Absolutely. Thank you for having me. You can find me on Instagram @HeatherBlankenshipx3 or my website at heatherblankenship.com.

Ashley Kehr:
And also on TikTok. Before we started recording, we started talking about TikTok too.

Heather Blankenship:
Yes. Same on TikTok, heatherblankenshipx3.

Ashley Kehr:
Okay. Well, thank you so much. We really enjoyed having you on the show today. Everybody, make sure you guys check out our YouTube channel, Real Estate Rookie, subscribe to the channel, and then also join the Facebook group. We are skyrocketing with over 30,000 people in the group. So, much advice given every single day. If you guys need help with a deal, so many people in there that can help you. I’m Ashley @wealthfromrentals, and he’s Tony @tonyjrobinson on Instagram. And we will be back next Wednesday with a new episode.

 

 

 

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In This Episode We Cover

  • The benefits of owning a campground or RV park
  • How commercial real estate differs from residential real estate
  • Financing big deals through bank loans and seller financing 
  • Looking for commercial BRRRRs and value-add opportunities
  • Long-term parks vs. short-term parks and the benefits of both
  • Developing systems that leave you less reliant on third-party businesses
  • And So Much More!

Links from the Show

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