All Forum Posts by: Mark Lawson

I have about 800 pads in the southeast and here are a few things to keep in mind. 

1. Zoning is your biggest issue to deal with if you are plan to build your own park. Most counties will require A1 (agricultural) or C1 (commercial) but there are often other regulations beside just the zoning type. For example some counties will require at least 10 acres. I had a FL county tell me they had a "pause for zoning" in place and planned to require that the RV parks were in an area that had sewer (not even sure if this is legal). Some also put stay limits on the parks so the people must move every 90 days. 

2. Utilities is a big cost and if you are not in a area with city water you will need to test your well water often. Keep in mind that the city does not have to let you use their sewer and often times there is a tap fee for each pad that can get expensive. In most areas you can get 4 RV's for each 1k gallon septic tank and 7 on a 1500 gallon but that will vary. With power you want to make sure you install 50amp as most new RV's will be 50amp. 

3. Determine what type of park you want to be such as long term tenants or a vacation destination or a resort type park. There is big demand for all of them and areas with a lot of workers do well with long term no frills type parks. Those people are looking for monthly deals vs a nightly rate. Resort type parks will need amenities and they are very costly to build but those type of clients tend to pay weekly or nightly at a much higher rate. 

4. If you are building talk to your county offices because you will find cost that you do not think about and to give you an example some counties will have a fire marshall and sometimes they want you to run fire hydrants and if you are crossing a major state road you may have to tunnel under and that can add $50k to your cost. 


5. The average cost per park right now is about $50k per pad (you can see a list at https://blackwatersouth.com/parksforsale.pdf) and you can build them cheaper than that but the zoning is always difficult in metro areas. The average cost per pad for us is about $22k for a new build not counting the land but some have been as cheap as $12k per pad. The type of surface and sewer will play a major factor. 


They can be very profitable if you can buy them right. Our average return is around 22% to 25% per year. It just comes down to finding the deals. Even as recent as 5 years ago it was mostly mom and pop operators and you could find deals but there are a lot of institution buyers hunting the deals now so it is a lot more competitive.  You have 1m people living in RV's full time and only 600k long term pads and with housing cost going up that number is growing. 

I own an operate a lot of RV parks and we always ask guest to provide exit surveys and we are in the process of raising capital for a new resort in southeast TN and the number one feedback we get out of the parks in the Gatlinburg area is the guest hate the traffic which have pushed a lot of long term RV pad rentals into other less crowded markets in TN. 

I think a lot of the STR issues are the fees have gotten out of control. It is mostly Airbnb but even some of the cabin rental companies started charging ridiculous fees such as a "hot tub draining fee" when they are not draining the hot tubs after each use. The fees are pricing a lot of people back into hotels.

I am looking to finance a property in TN that is currently a commercial property that is a former golf course that I am subdividing and selling most of it off to adjacent home owners in the HOA and keeping some of it for an RV park in order to save build out cost by using the amenities from the golf course for the RV resort.

The course is closed so there is no NOI and there are many buildings on the property but they are not rented or generating income so it has made it hard to finance. I am looking for about $980k which leaves me and my partner paying around 40% down. The property appraises on the tax appraisal at about $2.6m.

It is on multiple parcels so I do have the option to pull 4 different loans at $250k each and each parcel would value well over the loan amount which might make it easier because of less risk to lenders from a loan amount standpoint. I have had a ton of brokers tell me "yes we can do that" and then after wasting a lot of time they come back and tell me they do not offer those types of loans. I have plenty margin in the property so even if it is a more expensive route it is worth it but I am not having much luck. I am even willing to take on some partners but just looking for some ideas for lenders who will load on land projects.  

Looking for an equity partner for an RV Resort in TN. Our company has a vast amount of experience in the RV park industry and this will be a branded (major franchise) park with over 100 pads in the East TN area. Property will value around the $3m range when complete and current as is value is $2.6m. Looking for a partner at $550k for 30% ownership but each investor will be 1st position or can take deed if you would like. The capital need will be short term and around 12 months and GP will refinance at completion. PM me for more info and the OM. 

My company specializes in RV and MHP parks and we have a buyers list of over 27k people so send me what you have and I will see if it is a good fit for any of our buyers

I have a project we are working on and taking on some partners and one of them is wanting to use a 1031 for his buy in. The project is a branded RV park and Golf course so it is a some what expensive property so I wanted to take on a few partners at $550k each. One of the investors wants to use the 1031 and be listed as a tenant in common on the deed. The property is on multiple parcels in two different counties in TN and all of the parcels have a tax appraised value well over the $550k so I am considering doing this and listing him as a TIC in one parcel.

Has anyone every used a 1031 in a partnership or have ideas on how to make this work. This investors has done several deals with me so I want to find a way to make it work just out of loyalty. 

Quote from @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!

 Sorry I had not logged in for a while but that park was 27 pads. If you need data for a valuation you can find a lot of it at www.blackwatersouth.com/stats.pdf

I have them in seven different states so they are feasible to manage from a distance. You will find a lot of good staff from camp workers which are usually retired people who want something to do and will trade work for a place to stay and a little pay. 

The issue with the owner financing deals is the RV park industry is booming and there are a lot of institutional buyers with lots of cash in the market buying up the parks so most of the owner financing deals I see have a catch and there is a reason they are offering terms. For example you see a lot on the market in TX and OK because oil jobs have slowed way down and that is what was driving the business and now that it has slowed there are a lot of parks on the market in those areas. 

It is a great business is ran correctly. You are renting dirt for $500 to $600 a month and some of our FL parks are $1500 a month. You have far less repairs and no $5k AC units to replace or $50k roofs so they can be very good investments. 

Looking for investors or a direct buyer for a RV park in Wyoming. It is 66 acres (being subdivided) and has around 4800 sq ft of buildings. It has a club house, owners quarters, bathhouses. maintenance buildings, concession stand with commercial kitchen. It was used as an RV park and a shooting range (it came from an estate sale after the owners death) and would be perfect to use the 20 RV pads to generate revenues and then use part of the shooting park as a area from glamping. It is 15 mins outside of the 3rd largest city in WY and the area has a lot of demand for RV pads from oil field works and hunters. It would also be a great airbnb. The estate valued you it at $1.1m but it can be purchased for far less but would rather find some investors and keep it an operate it. Looking for around $775k for full purchase and open to discussing investment options.

If you are looking for a great real estate investment this 8 unit RV park offers a great return on investment. The park has been closed a few years but could be reopened very quickly. The property is a little over 7 acres but only about 1.3 are flat and used for the campground area. You could easily put glamping or tree house rentals on the rest of the property. The property is grown up but we do have crews coming this week to clean it up.

Long term RV pads are in high demand with over 1m people living in RV's full time and only 600k long term RV pad rentals in the country and TN is in very high demand. Property is located close to Cummins Falls state park and the Cumberland River. Average rent rates per month for full time RV pads are around $500 to $600 a month so the property can generate $3k to $4,800 a month when fully rented. This will provide a great return on investment.

You can see pics at https://photos.app.goo.gl/iDv7...

Priced at only $139,000 firm. No owner financing. Most areas it will cost you $50k in permits to build a park!