House Hacking and Campground Hacking??

Question

Property is located very close to popular eastern Oregon State Park. I am currently leasing the house, main shop and a few other out buildings. The owners want us to buy the place! The whole property is 1200+ acres with about 30 irrigated. At another location is a small apartment with a shop and airplane hanger as well. I feel that the location is prime to set up a campground and also house hack the other buildings to cater to the tourist that come out to the State Park. I have done some simple estimates and research and believe that it could be a lucrative business. My wife and I also have a pastry shop which we could add a small store at the location. Would love to get any advice of suggestions that you may have to offer. How to find demand? Startup? Oregon laws and regulations with campgrounds and house hacking?

Thanks a bunch!

Eric Bilderback · Answer

@Jake Tolton

Your going to need to look into the zoning.  I would go down to the city hall or county and tell them your plans and what they say.  That is a heck of a lot easier then trying to figure it all out on your own.  But verify what they are telling you.

Brenden Mitchum · Answer

Hey @Jake Tolton, welcome to the BP community!

Absolutely love this idea! As an avid camper/hiker, owning a campground sounds pretty cool to me. Obviously, I would hire out all the management stuff because I'm sure the day to day is not that riveting.

That being said, there is a lot going on here. Your first step would be to break everything down into manageable pieces for underwriting. So underwrite each property type/business separately and only pay for what is currently there. Do not pay for the potential upside or you will end up paying for it twice and why should the seller get rewarded for something they were too lazy/unable to do. You'll definitely want to find someone with experience in this sort of deal to get some underwriting tips.

The one thing I can help with is demand. First, let's talk the campground. How many other campgrounds are nearby? If there are none, are there hotels/airbnbs that cater to people going into the park? How far are you from the park entrance? How far from the most popular trails? If you're within 30 minutes of the entrance, I'd bet there are other campgrounds nearby. This is a good sign, but you'll want to find out how filled they are on nice weekends. You'll also want to know what their occupancy is on crap weekends and weekdays. This will give you a good idea of demand in the area. Obviously, if they're filled on most weekends, the demand is solid. If they are not, you will want to figure out why that is. Are they charging too much? Do they have poor advertising? If neither of these are true, there likely is not much demand, especially if this is the case for all or most of the campgrounds nearby. Lastly, don't compare yourself to campgrounds within the park because this is not the same product as your campground but it would be good to know how many there are because 9 times out of 10 people will choose to stay within a park over outside the park, unless your campground is beautiful or has other amenities.

Hope this helps a bit. Please, keep us posted on how the project goes and feel free to reach out to me anytime if you have other questions or just want to chat.