b'tional director of brokerage for Yale RealityandCapitalAdvisorsin Miami, Fla. Our experience is they dont want to sell until they need to sell. I would say, generally, if people planned to sell a few years in ad-vance, they would get more out of their properties. The Achilles heel for many pri-vateparkoperators,particularly the less sophisticated ones, is miss-ing or incomplete financial data.Hendrickson said he likes to see at least three years of profit and loss statements withline-by-linede-tail, on a month-by-month and not aggregated year-end format, and in Excel, preferably. Same with occu-pancy reports, same format, and a T-12 or trailing 12-month version as well. Investors may love your park and the location and the potential, but they have to understand the fi-nancial health (of the park) in de-tail, he explained. There is a lot more to this, of course, but the eas-ier you can make it for investors to understand very quickly how the park is performing and track your financialsinwhatwecallseller ready condition, thats the key to the least stressful and most benefi-cial transaction for all involved. Phil Artz, marketing director for Parks and Places, which has offices in Grand Rapids, Mich., and Talla- $2 million and fixes the things wecommand a higher price with reallyof a purchase price in cash. It is es-hassee,Fla.,identify, he could increase his grossgood data, Cook said.pecially important in this market said,Werec- annual revenue from $3.5 millionBe diligent in documenting yourfor buyers to be cash ready, said ommendthatto $5 million and the value of hiscash.SomeparkoperatorspullArtz. park sellers havepark would go from $30 million tocash out of their business to lowerIdentify lenders who are willing their paperwork$40 million. In other words, if hetheir tax liability. But this practiceto provide you with financing for in orderfinan- spent $2 million in improvements,undermines a parks ability to max- your private park purchase. Some-cials, equipmenthe could net $8 million.imize its selling price. If you hidetimes, your local bank will follow listsanddueThe problem is that many park$20,000or$30,000ayear,youreyou out of state, Cook said. Other diligenceitemsoperators who are at or nearing re- losing $300,000 in potential value,times, you will need to use a lender Phil Artzand to be pre- tirement age, dont want to makeCook said. Hiding $20,000 to savewhere the asset is.pared for a largethese kinds of investments or put in$7,000 in taxes could end up cost- Onceyouidentifyaparkyou amountofinterestfrombuyersthe amount of effort thats requireding you $300,000. Youre screwingwould like to purchase, hire a con-once the property is on the mar- tocommandtopdollarfortheiryourself when you try to screw thesulting firm that specializes in the ket. parks.government.private park business to independ-The challenges for sellers, how- The people who build a park areWhile there are many sophisti- ently analyze the parks financial ever,oftengobeyondhavingenthusiastic when they build it, andcated institutional buyers who arepotential.Mostprivatecamp-properfinancialdocumentation.30 years later theyre tired. Askinginvesting in parks, less experiencedgrounds and RV parks were built 40 This is particularly true for parksthem to recreate themselves at thiscampground and RV park buyersor 50 years ago, and most of them thathavebeenownedandoper- stage is difficult, he said.also need to prepare to have a suc- need improvements of some kind, atedbythesamefamilyforBaehreaddedthatmostofhiscessful park purchase. Cook said.decades. clients want to purchase parks thatFor park buyers, brokers offer theLikeningprivateparkstothe The majority of the owners wearealreadyprofitablebusinessesfollowing suggestions: hospitality industry, he said, There do business with have owned (theirthey can simply take over. ThereStart talking to brokers at leastare a ton of Motel 6s and Holiday park) for 20, 30 or 40 years and thearemorepeoplenowwantingsix months before you try to pur- Inns, but theres an abundance of patriarch or the founding membersturnkey parks, he said. chase a park. You need this time(RVowners)lookingforhigher are ready to retire, and the kids areFor those RV park sellers who areand the information you glean fromqualityparks.Themostunder-not interested (in taking over theinterestedininvestingthetime,brokers to determine what segmentserved portion of this industry is business). Usually, by that point,money and effort to command theoftheprivateparkbusinessyouthe high-quality section. Go for the Cooksaid,theparkneedsim- best price for their parks, Cook of- want to target, Cook said. Do youhighroadandyouwillfindyou provements,thewebsiteisout- fersseveralsuggestions.Amongwant a campground or RV park thathavealongerlistof(potential dated,themarketingisoutdatedthem: targets overnight guests or a parkguests). and the rates are below market.Study your competition. Do awith long-term guests, or a mix ofThatsaid,Cooksaidbuyers Inothercases,parksperformrent study with all of your competi- both? should not only budget for the cost poorly when the owner has turnedtion.DeterminewhereyouareLookforexperiencedcamp- of purchasing a park but improving over management of the park to acompared to the market. Give your- ground brokers with local expert- it.Budgetupfrontfortheim-manager who develops personal re- self an honest assessment of yourise in the geographic markets thatprovements needed to modernize lationshipswithhisguestsandamenitiesandrents,evenifyouinterest you. Its hard to be an ex- the park to catch it up (to current wouldratherhavehisfriendsneed to hire a third party to do so.pertineverythingandineverymarketneedsandrequirements) come back each year than push outGive yourself an honest assessmentarea, Baehre said, adding that hefrom how it was built, he said.the bottom 10%. The problem isof where you stand and what youspecializes in Texas and Oklahoma Look at the amps at all of the that these kinds of issues, if not ad- might be missing.and refers businesses to other pri- hookups. Look at how many spaces dressed,willreducethesellingLook at your oldest RVs and yourvate park brokers with expertise inare just electric and water, but dont price a park owner is able to com- oldesttenants.Considersayingother regions of the country. Hav- have sewer. Today, people want full mand, even in todays market.goodbye to them if they are scaringing local knowledge is key. Even inwater, sewer and electric hookups. The biggest issue, however, is theoff higher quality tenants.Texas, you cant compare a park inFind a good wireless Internet solu-condition of the park before selling.InvestinamodernRVparkthe Rio Grande Valley to a park intion. Thats a major need. Even sen-Cook described a recent situationmanagement software program toAustin, he said. iorswhoareretiredwantafast involving a client who wants toptrackyourfinancials.InvestorsCreate a resume for yourself thatInternetconnection.Figureout dollar for his park.wantsophisticateddatatrackingreveals who you are as a borrower.how to solve any Internet issues at I documented that if he investsyour parks performance. You canLenders often require 30% to 35%the property. Consider upgrading WOODALLSCM.com April 2022 29'