RV park due diligence is not a box to check. I have watched smart people buy bad deals. Not because they were careless or uninformed, but because they fell in love with the asset before they finished the work. The park was beautiful. The seller was charming. The location was exactly what they had been looking for. And somewhere between the letter of intent and the closing table, due diligence became a formality instead of an investigation.
That is the most expensive mistake you can make in an RV park acquisition. Due diligence is not a box to check. It is the only period in the entire transaction where you have the right to demand the truth and walk away without consequence if you do not like what you find. Every day you spend in due diligence is a day you are still protected. The day you close, that protection is gone.
This post is about what you are actually looking for during due diligence, specifically on the financial side, and the places where sellers, intentionally or not, present a picture that does not match reality.
Why the Financials You Receive Are a Starting Point in RV Park Due Diligence, Not an Answer
The first thing a seller or broker will send you is some version of a profit and loss statement, maybe two or three years of them, along with an occupancy summary and possibly a rent roll if there are long-term guests. These documents are not lies exactly, but they are almost never the complete picture either.
Seller-provided financials are prepared to support a sale. That does not mean they are fraudulent. It means the seller has every incentive to present the numbers in the most favorable light possible, and most of them do. Expenses get omitted. One-time revenue events get normalized as if they happen every year. The owner’s own labor goes uncompensated in the financials, making profit look higher than it would be for someone who actually has to pay a manager. Capital expenditures get treated as irregular rather than recurring. Deferred maintenance does not appear anywhere because it has not been paid yet.
Your job in due diligence is not to accept the financials you are given. Your job is to rebuild them from scratch using source documents and ask very specific questions about every line that does not make sense.
The Documents You Need and Why Each One Matters
Bank statements are the most important financial document in an RV park acquisition and the one sellers are most reluctant to provide. I want to see at least 24 months of bank statements for every operating account, and I want to reconcile them against the P&L the seller provided. If the deposits in the bank statements do not match the revenue on the P&L, something is wrong. It could be innocent, a timing difference, multiple accounts, a payment processor that settles on a delay. It could also be undisclosed revenue that was kept off the books for tax purposes, which creates a completely different problem for you as a buyer.
Tax returns are the second most important document. A seller who reports $350,000 in revenue on their P&L but $220,000 on their tax return has some explaining to do. The gap is sometimes legitimate, timing differences, depreciation treatment, entity structure. But it needs to be explained and documented, not hand-waved away. If a seller tells you the tax returns do not reflect the real income because they run personal expenses through the business, that is not a reason to pay more for the park. That is a reason to pay based only on what is verifiable.
Reservation records and occupancy reports from your property management system give you a transaction-level view of revenue that is very hard to fabricate. I want to see actual reservation data for at least two full seasons, not just a summary. I want to know how many sites were occupied on which nights, at what rates, and through which booking channels. This lets me build my own occupancy and revenue picture independently of anything the seller has told me.
Utility bills for the last 24 months tell you two things. First, they tell you what utilities actually cost to run the property, which is frequently understated in seller financials. Second, they show you seasonal patterns that can reveal operational issues the seller has not disclosed. A spike in water bills in one particular month might indicate a leak. An electricity cost that is dramatically higher than comparable parks might indicate aging infrastructure or an inefficient system.
Insurance policies and claims history can reveal things about the property that never make it into a financial document. A park that has filed multiple claims for storm damage, slip and fall incidents, or equipment failures is telling you something about the physical condition and operational risk of the asset. Ask for five years of claims history, not just the current policy.
How to Rebuild the NOI Yourself
This is the core financial work of due diligence and the step that most buyers either skip or do superficially. Rebuilding NOI means starting from zero with the revenue and expenses you can verify independently, and arriving at a number you are confident represents what the park actually generates under normal operations.
On the revenue side, I start with reservation records and calculate an independent occupancy and ADR figure for each of the last two full operating years. I adjust for any one-time revenue events, a special event that happened once, a grant that was received, an insurance settlement that inflated one year. I also adjust for revenue that was present but may not continue, a large group booking from a company that has since relocated, a long-term guest who has already given notice.
On the expense side, I add back everything the seller left out. A management fee at market rate, typically 8 to 12 percent of revenue, even if the owner self-manages. A capital expenditure reserve, typically 3 to 5 percent of revenue for a well-maintained park and higher for one with deferred maintenance. Any expenses that were run through the business personally and need to be removed. Any expenses that were omitted and need to be added, insurance at actual replacement cost, property taxes at the post-sale assessed value, utilities at the actual historical average.
The number I arrive at after this rebuild is the NOI I underwrite the deal on. Not the seller’s number. Not the broker’s number. Mine.
The Conversations That Happen When You Push on the Numbers
How a seller responds when you start asking detailed questions about their financials tells you as much as the documents themselves. A seller who has nothing to hide will be slightly annoyed by the thoroughness of your requests and will provide what you need, maybe slowly, maybe with some grumbling, but they will provide it. A seller who gets defensive, who tells you the questions are excessive, who suggests you are wasting everyone’s time, who offers explanations that do not quite hold together, is showing you something.
I have walked away from deals that looked attractive on paper because the seller’s behavior during due diligence made it clear the documents could not be trusted.
What You Are Buying and What You Are Not
One final thing worth saying clearly. When you buy an RV park, you are buying a business, not just a piece of real estate. You are buying a guest relationship, an operational infrastructure, a reputation, a staff if there is one, a set of systems, and a financial history. All of those things need to be evaluated independently of how pretty the park looks or how compelling the seller’s story is.
The financials are the language the business uses to tell you the truth about itself. Due diligence is your job of learning to read that language fluently enough to know when something does not add up. Do that work completely, skeptically, and without rushing, and you will either find a deal you can close with confidence or a reason to walk away before it costs you everything.
I have reviewed deals where the due diligence process was painful and slow and revealed problems significant enough to kill the transaction entirely. That is not a failure. That is the process working exactly the way it is supposed to. The discomfort of a hard due diligence is infinitely cheaper than the discomfort of closing on a deal that should not have closed.
Either outcome is a win.
Read this next: The $312,000 Mistake: What Happens When a Buyer Accepts the Seller’s NOI Without Rebuilding It
I walk through the full due diligence financial checklist for RV park acquisitions in ๐๐ฟ๐ผ๐บ ๐ข๐ณ๐ณ๐ฒ๐ฟ ๐๐ผ ๐ข๐ฝ๐ฒ๐ฟ๐ฎ๐๐ถ๐ผ๐ป: ๐ง๐ต๐ฒ ๐๐ผ๐บ๐ฝ๐น๐ฒ๐๐ฒ ๐ฅ๐ฉ ๐ฃ๐ฎ๐ฟ๐ธ ๐๐ป๐๐ฒ๐๐๐ผ๐ฟ’๐ ๐๐๐ถ๐ฑ๐ฒ ($49). Available at wendipvifinancial.gumroad.com/l/kqmyb and on Amazon under my name, Wendi Rook.
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