Buying a mom and pop RV park is one of the most talked about strategies in outdoor hospitality investing right now, and for good reason. The majority of RV parks in the United States are still owned by small independent operators who have been running the same park for decades. Many of them are ready to retire, priced reasonably relative to their income potential, and wide open to value-add improvements that a new owner with fresh capital and modern systems can implement quickly.
But buying a mom and pop RV park comes with a specific set of risks that are very different from buying a professionally managed, institutionally priced asset. These are not risks that show up obviously in the financials. They are embedded in the operations, the infrastructure, the customer relationships, and the systems, or more accurately the lack of systems, that the previous owner relied on for years. These are the risks that make buying a mom and pop RV park so different from any other real estate acquisition.
Miss them in due diligence and they will find you in month two of ownership when the septic alarm goes off at 2am or your best long term tenant tells you they are leaving because the new rates do not work for them.
This post walks you through the seven most common and most costly hidden risks in buying a mom and pop RV park, and exactly what to do about each one before you close.
Here are the seven hidden risks that destroy first year cash flow
1. The financials are in the owner’s head, not in a bookkeeping system
The first thing most buyers discover when buying a mom and pop RV park is that the financial records are a mess. Not because the seller is dishonest, but because a small owner-operator who has been running the same park for 30 years often manages the money the way they always have, from habit and intuition rather than from a system.
Revenue may be tracked in a notebook. Expenses may be paid from a personal account mixed with business transactions. Cash transactions may not be recorded anywhere. Tax returns may show a very different picture than what the seller tells you the park actually earns.
This matters enormously when buying a mom and pop RV park because the financials are the foundation of your valuation. If you cannot verify the revenue, you cannot trust the NOI, and if you cannot trust the NOI, you cannot know what the park is worth.
Here is what to do. Request three years of tax returns alongside the P&Ls and match them. Tax returns are harder to manipulate than internal financials and any significant discrepancy between what the seller reports to you and what they report to the IRS is a major red flag. Also request bank statements and match deposits to reported revenue month by month. For more on how to verify the numbers, read How to Evaluate an RV Park Deal: The 6-Step System That Exposes What the Numbers Are Really Saying.
2. Deferred maintenance is everywhere and none of it is in the price
Buying a mom and pop RV park almost always means buying years of deferred maintenance that the seller either could not afford to address or simply chose to live with. Aging electrical pedestals, cracked roads, failing septic systems, outdated bathhouses, leaking roofs on common structures, and deteriorating utility infrastructure are all common findings in parks that have been owner-operated for decades.
None of this shows up as a line item in the financials. In fact, deferred maintenance artificially inflates NOI because money that should have been spent on upkeep was never spent. The park looks more profitable than it really is because the owner was effectively borrowing against the asset by not reinvesting in it.
Before you close on any mom and pop acquisition, walk every inch of the property with a licensed contractor and get written estimates for every repair and improvement item you find. Add that total to your post-close capital requirement and factor it into your offer price. A $2 million park with $300,000 of deferred maintenance is a $1.7 million park. For more on budgeting for these costs, read RV Park Capital Expenditures: 3 Budgeting Mistakes That Wreck New Owners in Year One.
3. Long term tenants at below-market rates
This is one of the most common and most financially damaging surprises in buying a mom and pop RV park. Owner-operators frequently develop personal relationships with long term tenants over years or decades and charge them rates that have not been adjusted to reflect the market. In some cases these tenants are paying 40% to 60% below what the site could command at market rates.
On the surface this looks fine. The sites are occupied and generating some revenue. But when you buy the park and raise rates to market levels, some of those long term tenants will leave. Your occupancy drops, your revenue takes a hit, and your NOI for the first year looks nothing like what you modeled going in.
When buying a mom and pop RV park always request a complete rent roll showing every tenant, their current rate, their length of stay, and their lease terms if any exist. Compare those rates to market rates for similar sites in the area. Then model a conservative scenario where 20% to 30% of below-market long term tenants leave when rates are adjusted. That is your realistic first year picture. For more on how long term tenants affect your books, read Long-Term RV Guests Are Taking Over: 5 Ways It Breaks Your Books.
4. The owner IS the management system
When buying a mom and pop RV park you are often buying a business that runs entirely on one person’s institutional knowledge. The owner knows which pump has a slow leak. They know which guest always pays late. They know the county inspector by first name and when the annual inspection typically happens. They know the password to the reservation system that nobody else has ever logged into.
None of that knowledge transfers automatically when you close. If the seller walks away on closing day without a structured transition plan, you are starting from zero in a business that depends on relationships, routines, and local knowledge you do not yet have.
Always negotiate a transition period as part of the purchase agreement. A minimum of 30 to 60 days where the seller is available by phone and email to answer questions is ideal. If possible, arrange for the seller to be on-site for the first two to four weeks after closing to introduce you to key tenants, vendors, and local contacts. For more on what the first months of ownership look like, read The First 90 Days: What Nobody Tells You About Running a Park After You Close.
5. Unpermitted structures and zoning issues
Unpermitted structures are one of the most common legal landmines in buying a mom and pop RV park. Buying a mom and pop RV park often means buying a property that has been added to, modified, and expanded over decades without always following the proper permitting process. A storage shed built without a permit. A bathhouse addition that was never inspected. Additional sites added beyond what the original permit allowed. Seasonal structures that became permanent without approval.
These issues are not always malicious. Small owner-operators often do not know or do not think about permits for minor improvements. But when you buy the property those unpermitted structures become your liability. A county inspector who has looked the other way for years may not extend the same courtesy to a new owner.
During due diligence request copies of all permits and certificates of occupancy for every structure on the property. Then verify them with the county directly. Any structure that cannot be permitted should be factored into your offer as a potential cost to remediate or remove.
6. Vendor and service relationships that do not transfer
When buying a mom and pop RV park you will almost certainly inherit a set of vendor relationships that exist because of the previous owner’s personal network, not because of the business itself. The plumber who comes out same-day because he has known the owner for 20 years. The landscaper who gives a family discount. The propane supplier who extends net-60 terms as a favor.
Many of these relationships will not transfer to you as the new owner, at least not automatically. You may pay more, wait longer, and lose access to services that the previous owner took for granted. Budget for this in your first year operating expenses. Assume vendor costs will be higher than what the seller reported until you have had time to build your own relationships and negotiate your own terms. Budgeting for higher vendor costs is a non-negotiable part of buying a mom and pop RV park successfully.
7. The park’s reputation is tied to the previous owner personally
This is the hidden risk in buying a mom and pop RV park that almost nobody talks about but that can have a real impact on your first year revenue. Long term guests and repeat visitors often come back to a park because of the people running it, not just the location. When the beloved owner-operator of 30 years retires and a new owner takes over, some of those guests will not return.
This is not something you can fully prevent but you can manage it. Reach out to regular guests before closing if possible and introduce yourself. Keep any staff the previous owner relied on, at least through your first season. Maintain the personality and character of the park that guests loved while you make operational improvements behind the scenes. And monitor your online reviews closely in the first six months of ownership because guest sentiment after a transition is one of the earliest signals of whether you are retaining the customer base.
The SCORE Small Business Association has excellent free resources on business acquisition transition strategies that are worth reviewing before you take over any owner-operated business.
The bottom line on buying a mom and pop RV park
Buying a mom and pop RV park can be an extraordinary investment when you go in with your eyes open. The value-add potential is real, the pricing is often reasonable, and the opportunity to professionalize operations and grow revenue is significant. But the risks above are also real and they are the ones that blindside buyers who did not know to look for them.
The best protection is thorough due diligence, a complete financial rebuild, and a realistic first year operating budget that accounts for the transition period honestly. If you want help with any of those pieces, from underwriting the deal to stress testing your first year projections, reach out at PVIFinancial.com and let’s make sure you know exactly what you are buying before you sign.
~Wendi | Fractional CFO | PVIFinancial.com
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