I have reviewed a lot of RV park deals. Rebuilt the NOI from scratch, stress tested the assumptions, gone line by line through the financials looking for what the seller was not saying out loud.
And over and over again, the same two things show up after closing that nobody budgeted for. Not because the buyer was careless. Not because they skipped the financials. But because these two items do not live in the financials at all.
They live in the ground. And in the walls. And by the time you find out they are a problem, you already own the park.
I am talking about septic and electrical.
If you are evaluating an RV park right now, or planning to, read this before you make an offer.
The Septic Problem
A private septic system does not show up on a profit and loss statement. It does not appear in the T12. It will not come up in a conversation with the seller unless you specifically ask for inspection records, and even then, many sellers have not had the system professionally inspected in years.
Here is why this matters. A commercial septic system serving an RV park is not the same animal as the system behind a single family home. It is handling waste from dozens or hundreds of connections simultaneously, often for extended periods during peak season. These systems have a capacity rating and a lifespan, and when they are at or near the end of both, the indicators are not always visible. The grass looks fine. The system seems to be draining. And then on your busiest weekend in July, it fails.
Remediation costs for a failed commercial septic system start around $50,000 on the low end. Parks with larger systems, difficult soil conditions, or local regulatory requirements can be looking at $200,000 to $500,000 or more. I have seen it. The number is real.
What makes this particularly dangerous in an acquisition is that the seller may genuinely not know the system is approaching failure. They have been running the park successfully for years. The system has always worked. They have no reason to disclose a problem they are not aware of.
Your job as a buyer is not to assume good faith covers the risk. Your job is to require a professional inspection with a written capacity assessment before you remove contingencies. Not after. Before.
What you want from that inspection is not just confirmation that the system is currently functioning. You want to know the rated capacity relative to the number of sites, the estimated remaining useful life, and whether the system has ever been pumped, repaired, or expanded. If the seller cannot provide documentation and will not allow an independent inspection, that is your answer.
The Electrical Problem
The electrical distribution system at an RV park is infrastructure most buyers never think to interrogate because it is invisible. You cannot see it during a walkthrough the way you can see a deteriorating road or a bathhouse that needs renovation. The pedestals look fine. The lights are on. Guests are plugging in without complaint.
But here is the reality. The average RV on the road today draws significantly more power than the average RV from 15 or 20 years ago. Modern rigs with residential refrigerators, washer-dryer combos, multiple air conditioning units, and entertainment systems routinely require 50-amp service. Many parks, especially those built or last upgraded in the 1990s or early 2000s, were wired for a world of 30-amp service that no longer reflects the market.
An aging electrical distribution system creates three problems. First, it limits the guest segment you can serve. Larger, newer rigs will either avoid your park or generate complaints when they cannot get the power they need. Second, it creates reliability issues. Older wiring and pedestals fail more frequently, and a power outage during peak occupancy is a guest experience and revenue problem on top of a maintenance problem. Third, upgrading the system is one of the most expensive capital projects you will face as a park owner. Running new service, replacing pedestals, upgrading panel capacity, and bringing a dated system to current standards can run well into six figures on a mid-sized park.
Like the septic issue, none of this appears in the financials. The seller is not hiding it. It just is not a line item. It is a future capital requirement that the current owner has been deferring, intentionally or not, and that you will inherit at closing.
The fix here is straightforward. Hire an independent licensed electrician to assess the distribution system before you close. Not the electrician the seller recommends. An independent one. Ask specifically for the amperage capacity at each site type, the age and condition of the distribution panels, and a written estimate on what it would cost to bring the system to current standards. Get that number before you finalize your offer, because it belongs in your total acquisition cost calculation, not as a surprise in year one.
Why These Two Items Are Different From Everything Else
When you find a problem in the financials, you can quantify it and negotiate it into the price. A seller who left out a management fee, a revenue figure that does not reconcile with the bank statements, an expense that looks inflated, these are all things you can put a number on and address at the negotiating table.
Infrastructure surprises do not work that way. You cannot negotiate a septic replacement after you close. You cannot renegotiate the purchase price because the electrical system you did not inspect turned out to be inadequate. The risk transfers at closing, fully and completely, to you.
This is why the physical inspection of the utility infrastructure is not a nice-to-have in your due diligence process. It is a requirement. The cost of the inspection is a rounding error compared to the cost of discovering the problem after you own the park.
What This Means for Your Offer
If you complete independent inspections of both systems and they come back clean, great. You have eliminated two of the most significant sources of post-close capital surprise and you can price the deal with confidence.
If the inspections surface problems, you have options. You can negotiate a price reduction that reflects the remediation cost. You can require the seller to address the issue before closing. You can use the findings to renegotiate other terms. Or you can walk away from a deal that does not work at a price that accounts for what you found.
None of those options are available to you if you skip the inspection.
A Practical Checklist Before You Remove Contingencies
Before you finalize any RV park acquisition, make sure you have checked off both of these:
Septic: Written professional inspection with capacity assessment relative to number of sites, documentation of pumping and maintenance history, and an independent estimate on remaining useful life and any recommended repairs.
Electrical: Independent licensed electrician assessment of the full distribution system, site-level amperage capacity documentation, age and condition of all panels and pedestals, and a written estimate on what upgrade to current standards would cost.
If either of those is missing when you are heading into the final stretch of due diligence, get them before you remove your contingencies. Not after.
The Bottom Line
The broker package shows you what the park looks like on paper. The physical infrastructure shows you what the park will cost you to operate. Those are two different conversations, and the second one only happens if you go looking for it.
I help buyers pressure test RV park deals before they commit, including identifying the capital requirements that do not show up in the financials.
If you are evaluating a park right now and want a second set of eyes on the numbers, reach out at pvifinancial.com, and before you make your next offer, request a copy of my book, From Offer to Operation: The Complete RV Park Investor’s Guide ($49). It covers everything from underwriting the deal to running the asset, and includes a bonus report with 34 red flags to verify before you close so you are not buying someone else’s problem.
~Wendi | Fractional CFO | PVIFinancial.com
Click here to read “The Seller’s Proforma is Not Your Proforma”
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