🧵 RV Park 101:
(1/8) Let’s talk about financing RV parks. This is one of the great inefficiencies in the industry that stops a ton of investors in their tracks, but also creates a lot of opportunity.
There are a few obscure national banks out there who will lend on RV parks…
(1/8) Let’s talk about financing RV parks. This is one of the great inefficiencies in the industry that stops a ton of investors in their tracks, but also creates a lot of opportunity.
There are a few obscure national banks out there who will lend on RV parks…
(2/8) that will lend at up to ~65% LTV, 20 yr amort, and interest rates in the 5’s. However, they’re likely not going to lend to anyone that doesn’t have a track record in the industry.
Next stop, local banks located near your target RV park: certainly worth reaching out to…
Next stop, local banks located near your target RV park: certainly worth reaching out to…
(3/8) but you’ll quickly find they either “get it” or they don’t. You may find better terms here if they’ll lend on RV parks, because they simply have a general commercial loan product they slap on everything.
Any of these bankers you come across may be thinking of pushing you..
Any of these bankers you come across may be thinking of pushing you..
(4/8) towards SBA product. This can be a great tool in purchasing certain RV parks, but it comes with a lot of red tape and frustration to close.
Also, SBA financing will NOT work for RV parks with long-term stays. The SBA will look at these more like apartments or MH and pass…
Also, SBA financing will NOT work for RV parks with long-term stays. The SBA will look at these more like apartments or MH and pass…
(5/8) In fact, the SBA looks for greater than 50% of your park’s gross income to be generated from stays of less than 30 days. This means NO parks with majority full-season stays, and NO parks that look more like mobile home parks with full-time residents.
(6/8) All this has led me to push for seller financing on all deals. It’s much easier to settle into the long haul of RV park due diligence when the financing is ironed out along with the purchase contract. But remember, all seller financing comes to an end!…
(7/8) You’ll likely have to go to a bank some day!
I’ll leave you with a tip on securing commercial mortgage loans that applies to all property types:
Lenders = salespeople. Some will tell you “yes” just to get the opportunity in the door even if it’s a long shot. Especially…
I’ll leave you with a tip on securing commercial mortgage loans that applies to all property types:
Lenders = salespeople. Some will tell you “yes” just to get the opportunity in the door even if it’s a long shot. Especially…
(8/8) if they don’t have a ton to work on at the moment. You’ll get the “no” at a later, much more crucial time after they have time to “run it up the flagpole”. I’ve learned this lesson the hard way a few times.
@abakermont @RVParkGuy anything to add here?
@abakermont @RVParkGuy anything to add here?
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