Over that past several months, I have been trying to determine if I want to develop an RV park or purchase an existing RV park. Today, for the most part, I’m still undecided. Here’s why. It all depends on what makes the most sense from a resource, financial and management perspective. The team I need for development is much more than if I just purchase a park.
Option 1 – I could develop a park; it will take quite a bit more time until my books see green and I’m pretty sure that won’t fit my timeframe for my exit strategy. There are numerous other factors to consider, I would need to add additional team members to my team, how much money will I need to fund a development project, where will these funds come from, and who will I get to develop and manage all the city, county, state regulations for the park?
While I believe I’m capable of managing a team from a high level, I would need an extensive team to pull that off. One team member I have already added to my team is a Civil Engineer. I’m not going to share his information here as I have not asked for permission to use his name or the company he is associated with simply because I have not yet engaged with him at a contractual level because I haven’t found “THE DEAL” that I’m looking for. However, when I do engage with him at a contractual level in the future, I will ask his permission.
Option 2 – I can always purchase an existing park. My best scenario would be to buy an existing park that needs work and perhaps there’s the ability to expand on adjoining acres. This option would give me the best of both worlds – developing and operating.
Option 3 – Buy an existing park. Perhaps, I can find a mom-and-pop park that’s already up and running located here in Central Florida that’s just plain tired of working with the public and they are ready to retire.
I’m going to share with you a couple of development opportunities that I have recently evaluated.
Development Opportunity 1 – This property was centrally located in Florida in an area that was heavily travelled. The location itself would draw in the people. It was an 80-acre parcel, that had been subdivided off from an existing RV Park. Back in the day, one owner owned the whole property, and his plan was to build a much larger park than the one that exists now. This owner went as far as hiring a Civil Engineer to draw up the Master Site Plan for the 80 acres. Upon my review of the Master Site Plan, it appeared to be doable.
I’m thinking, this property has potential, as part of the battle with water, electric and septic had already been won.
Upon further inspection of the Master Site Plan, I noticed the name of the Civil Engineer, so I called him. He was quite helpful and offered to get me original copies of the Master Plan and then he gave me this useful tidbit. He told me that the existing park had an HOA. This was significant because according to the Master Site Plan the only way to access the 80 acres behind this HOA was to drive through the HOA and use their well-manicured roadways. This meant we would need the HOA’s permission to have construction vehicles and future RV’s traveling through their development. Then when I asked him if he’d like to take on this project, he simply replied, no. Hmm?
I believe he had said no because he had indicated that he was at retirement age, and he was very picky on the opportunities he worked on. Nonetheless, I was still curious, and my driving nature wouldn’t have me stop here. I am the type of person that needs concrete evidence or a complete roadblock before I call it quits.
Now, that I had a lot of documentation in hand, I reached out to my civil engineer for his high-level review and opinion.
Before I dive into that, I would like to share that this Civil Engineer that I’m working with came to me as a referral as being the best there is.
Why? Its simple, he has extensive knowledge and experience with RV park developments and is well seasoned at his craft. You will learn that much later in another episode.
I gathered all my documentation and sent it via email over to my civil engineer.
His initial review yielded that this property was within the 100 Year Flood plane. This would complicate the design and require extensive research meaning a costly Feasibility Study amongst other costs and it would reduce the number of RV spots from the original plan which would impact future projected revenues.
What I haven’t told you yet, that on this project I was working with an investor, who would ultimately fund this deal.
I gave my investor the direct feedback and for whatever reason, he wanted to continue to do more research.
Ok, so I kept digging!
From here, I pointed out to the engineer that there was an HOA in place with the current RV Park and that the only access point was through this HOA. I thought that since this parcel was so large, then maybe we could locate another possible access point. I asked the engineer if he could validate moving the access point to another location, therefore avoiding the HOA.
The result as expected, there were no other access points anywhere on the property due to low lying water areas. He then told me that the HOA will most likely stand in the way of further development. As we both knew, the development had been planned at one point in time, but now the HOA had the control.
My investor would now have to sue the HOA to gain the necessary access.
After reviewing the roadblocks of suing the HOA and dishing out a lot more money than expected, the investor was out. Now, I understand why the initial Civil Engineer did not want to play this game.
Development Opportunity 2 – As with each I property I evaluate. I not only determine my exit strategy, I determine the best use of the property. The last project I just mentioned would have been a Destination Park – meaning people will come to stay here for longer periods of time. This next project I considered would have been what I’d call an overnight park – simply because of its location.
This is a 21-acre parcel sitting right in the cross hairs of 3 major highways but by my own definition it’s out in the boonies which makes this property attractive for several reasons. It’s quiet, rural and an easy stop over for snowbirds heading to their destination park.
Another unique feature of this property was that it has an existing 3500 sq ft building that was currently being used to host large events such as music festivals, car shows and other local events.
I worked directly with the owner on this project. Let me just say, that I wish every owner/seller was like him. He was kind, easy to work with and he gave me the time I needed to make an informed decision. I always kept him the loop with all my actions, and he did the same.
My vision for this project was to take the remaining acres, call it 21 acres minus the building and develop an RV park with the possibility of putting a convenient store onsite. Let’s face it, the nearest town was 10 miles away. This project also came with a predetermined Master Site Plan and a Topographical Survey that was years old and had been drawn up by a prior landowner.
I knew that in talking with the current owner, that this property was already zoned C3 -commercial for the RV park but I may need to meet with the County Zoning department, if I intended to change the use.
Off to the county I went. To make this story short, I dropped off a letter that I had created to describe what I wanted to do and the positive impacts it would have for the county, in hopes that someone would call me.
I didn’t get a call, but I did have the opportunity to have a Zoom meeting with the Zoning Director and her assistant. After presenting my idea, she soft approved me. Meaning, she was allowing me to move forward with the 10 Step Special Use process that would ultimately put me in front of the Board of Directors for approval. That didn’t scare me, I used to present for CEO’s and CFO’s back in my IT days.
My next step was to once again, pass this along to my civil engineer and at this point I did not yet have the topographic survey.
Upon his initial review, he said it would require re-zoning and work regarding the flood stage, but he would need the topographic survey.
Upon his review of the Survey, he found that the elevations of this property were several feet below the 100-year event. This just meant that any buildings, septic systems, or water systems would have to be 1 ft above the elevations or 3’ to 5’ above the current elevations.
I clarified with the engineer, you’re just saying this is not cost effective, but what if someone had enough money to jump that obstacle? He then pointed out that yes, money solves that problem, but it doesn’t solve that you now no longer have 21 acres to build. Due to the fact, that the elevation was taken away then that increased the ingress and egress, which ultimately means that the future income projections I calculated for 75 RV sites just dropped to under 55 sites. This means that it would take longer to see the profits. This didn’t fit within my exit strategy timeframe. So now, I was out.
I really had high hopes for that project, but the numbers don’t lie but I must say, I really enjoyed working with the seller and I really do pray he finds what he’s looking for. He has the right attitude and I’m certain it will work out for him.
I’m also very thankful for the referral I got for the Civil Engineer and the opportunity to one day soon engage with my Civil Engineer. As it is, he has gone above and beyond to help me out!
For the record – developing an RV Park does not scare me. In its simplest form it’s nothing more than playing in the dirt and burying some water and electric lines. Shoot, I’d even drive the bulldozer!
With every opportunity I review, I gain more knowledge and one day, I’ll be ready to implement!
If you know someone that is selling an RV park or maybe they are just tired of dealing with the public, please reach out to me at Info@fearlessinnovator.com or go to fearlessinnovator.com to connect with me.