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SHOW NOTES FOR EPISODE 686: I JUST BOUGHT AN RV PARK!
Even if you are strictly a passive real estate investor, there can come a time when you find an active deal that you simply can’t resist! In this episode, Bill shares how he stumbled upon just such a deal!
Introduction
OK, I know I know… for the last 6 months, I made a big deal about becoming a truly passive real estate investor coming into 2023. That I wasn’t going to buy any new properties and would only be passively investing in other people’s deals.
Well… in my defense… I also said you should be building up your cash for those amazing deals that will start popping up in the new recession.
Well, guest what, I truly stumbled across one of those deals and I just couldn’t resist.
As I may have mentioned, when I escaped California, I also happened to bring two of our children with us – my oldest son and my youngest daughter – both of which wanted to move to Tennessee also. They both started living with us but, once they got jobs they were planning to move out on their own. My oldest son got a great job but also found the girl of his dreams and now is married and has moved out. My youngest daughter found a great job in Knoxville, about an hour north of us and will also be moving out soon.
My son has been looking for a property with some acreage and I’ve been trying to help. And while we looking for properties, I literally stumble upon approx. 11.5 acres that was very unique…
- The owner had created a mini-mobile home/trailer park
- He purchased used trailers, ranging from 20-30ft, took the wheels off, put skirts around them and rented them out weekly, on a 6-month lease
- I’ve never seen a model like this
- It’s similar to the AirBNB medium-term rental but without have to buy:
- Furniture
- Appliances
- Or much of anything
- They are hooked up to electricity, water, propane and septic
- And he throws in Cable TV and free parking and washer/dryer access
We were just looking for land and hopefully a house.
We found land (over 1 acres of it) and 5 homes that gross $5,000 a month. Oh, did I mention the property was selling for only $215,000 and included the trailer rental business.
- 1% rule – this is at 3%
- With a 30% ROI, meaning I would make my property purchase amount back in 3.5 years
I was stoked but my son and his new bride were not. They loved the business but not the idea of living there. They still have visions of the house with the white picket fence, room for their kids, etc. And I get it!
But I thought… here is a great piece of cash-flowing land with tons of undeveloped property for more trailers, AirBNBs, tiny houses, glamping and more…
But before I got too excited, I started doing my research on RV Parks…
Here’s what I found out…
The market size of the campground & RV park sector in the United States totaled 6.38 billion U.S. dollars in 2021, up from the previous year’s size of 5.93 billion U.S. dollars. Likely fueled by Covid! The campground & RV park sector in the United States is projected to surpass the previous year and reach over 7.01 billion in 2022.
10,000 baby boomers are turning 65 EVERY DAY! And plenty of them are selling their big paid-for homes and are buying RVs and either traveling around the country and/or looking for a nice place to settle. Since I moved to Tennessee, I have been meeting lots of retired couple who are doing just that! …and I’m just here in Tennessee.
And, it’s not just boomers…
The rise of the Millennials (those in their 20s and 30s) who are taking to RV travel due to its simplicity and family bonding potential…
I have also met a number of younger people on my podcast who are doing just as a result of their recent financial independence achieved through real estate investing – digital nomads, couples with young children, singles who just want to travel and others.
And here is the best part…
In a recession, people will be experiencing hard times: job and income loss, possible foreclosures, and much more.
- People may have to sell their houses and either move into a rental or, they may want to buy an RV for the mobility and self-containment
- With their RV, they only need to pay for food, gas, maintenance, insurance and the cheap cost of staying at an RV Park
- It will also give them the opportunity to search for and try out other parts of the country to eventually relocate
- Or, they may, chose to spend their retirement years living permanently in their RV, having the freedom to travel any time they want to any place they choose (that you can reach on a road or by boat)
So, is owning an RV park a good investment?
Purchasing an RV park means you’re getting in on an already growing market (with even more potential for growth in the coming decade). RV parks also tend to offer higher yields to owners than other commercial property investments. As stated above, investors can expect a 10% to 20% return on investment.
So what happened to my passive real estate investing????
Well, I’m still committed to being a passive investor but, if we can set-up, develop and build this RV Park right, we can shift the operational part of it to our children who are interested and/or hire outside managers.
Either way, it looks like a solid recession-proof investment that has longevity and great potential for significant boost in value
Now for those of you who are saying, “Hey wait a minute… how can I get in on this?”
Well, the good news is that Every day, the biological clock is advancing for the mom & pop owners of RV parks from coast to coast. This means that they are becoming more motivated to sell, as they may have health issues and/or just a general loss of interest in the business. And since they have no debt, they can get extremely aggressive on price and even may carry the financing.
So, if you are motivated and don’t mind doing a little research, maybe you could also find another “diamond in the rough” like we did.
I’m not trying to talk you into anything, just sharing, like I do every week, another real estate investing strategy to consider.
And I recognize, this isn’t for everyone but…
Instead of slaving away at a desk, you can enter the world of RV living – from part-time campers to full time RV enthusiasts… you’ll spend your days surrounded by people who are excited to be where you are.
You can play tour guide, helping families find the best hidden gems in your area.
You can choose your location – from serene nature settings to more fast-paced metro areas.
You can run your business the way you want – whether you want to live there or oversee others that do.
The choice is completely yours when you own and operate an RV park…
And the best part is that it’s all 100% building YOUR dream and YOUR future… not the future of someone else.
Here’s the thing about RV Parks: they’re a lot of fun. Many of them can feel like a big backyard barbeque – families milling around, getting to know one another… long-time friends reuniting as they take vacations together year after year… an atmosphere of fun and relaxation, no matter where you are.
But even more than that… they’re a truly low-maintenance, easy way to grow your investment.
On average, an RV park will yield 10-20%+ on your money. In fact, they’re among the highest-yielding of all real estate assets. If your goal is to maximize the return on your investment… RV parks are a pretty good place to start.
What’s more – RV parks are at the center of a number of “megatrends” – big changes in America that have a huge effect on business.
Links:
- 341: Real Estate Investing in Billboards and Mobile Home Parks – Part 1
- 343: Real Estate Investing in Billboards and Mobile Home Parks – Part 2
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