PVI Financial

Author: wendirook

  • The Seller’s Pro Forma Is Not Your Pro Forma

    The Seller’s Pro Forma Is Not Your Pro Forma

    Every RV park listing comes with a pro forma. A clean one page summary showing gross revenue, expenses, NOI, and a cap rate that makes the deal look compelling. It is professionally formatted. The numbers add up. And it was built entirely to sell you the park.

    That is not your pro forma. That is the seller’s story.

    Here is what I mean by that.

    A pro forma is only as honest as the assumptions behind it. And the seller’s assumptions are always the most optimistic version of the truth. Not necessarily because anyone is lying. But because every single line item in that document was built from the seller’s cost structure, the seller’s relationships, the seller’s management style, and the seller’s years of accumulated advantages that will not transfer to you at closing.

    Let me show you what I mean.

    The seller self manages the park. No management fee in the expenses. Looks lean and efficient. But you are not moving to that park to work 60 hours a week. You need a manager. Add $40,000 to $60,000 in annual expenses that are nowhere on that pro forma.

    The seller has had the same insurance broker for 20 years. Grandfathered rate. Not available to new buyers. Your quote comes in $8,000 higher. Not on the pro forma.

    The seller’s maintenance guy has been coming out for half price for years because they are old friends. He retires when the seller does. Your maintenance costs double. Not on the pro forma.

    The seller has not put meaningful money back into the property in five years. No CapEx line item because nothing major has broken yet. But the electrical pedestals are aging, the bathhouse fixtures are worn, and the roads need grading. All of that is coming out of your pocket in year one. Not on the pro forma.

    By the time you rebuild the NOI honestly, adding real management costs, market rate expenses, normalized CapEx, and actual vacancy, that 8% cap rate on the flyer is often a 5% cap rate in reality. And at the asking price that is a completely different deal.

    So how do you build your own pro forma?

    This is the part most buyers skip because it feels complicated. It is not. It is methodical. Here is exactly how I do it.

    Step 1 — Start with verified gross revenue.

    Do not use the number on the flyer. Ask for three years of bank statements and tax returns and build the revenue from actual deposits, not reported income. Look at each revenue stream separately. Site rentals, laundry, store sales, event income. Know which ones are recurring and which ones are one time. If the seller cannot provide bank statements that match the reported revenue that is a red flag before you even get to expenses.

    Step 2 — Apply a real vacancy rate.

    Most pro formas use 5% vacancy or less. The reality for most parks is closer to 8 to 12% depending on seasonality and market. This is one variable that sellers almost universally get wrong in a pro forma.

    A seller’s pro forma is typically built on either current peak occupancy, historical best year occupancy, or a stabilized projection that assumes everything goes right. What it rarely accounts for is a realistic vacancy factor based on the actual seasonal patterns of that specific park in that specific market.

    Before you accept any revenue projection at face value, pull the monthly occupancy numbers for the last three years and build your own occupancy assumption from the bottom up. If the park runs at 90 percent in July and 20 percent in January, your annual average is not 55 percent and your cash flow model needs to reflect the monthly reality, not the annual average.

    A pro forma that ignores vacancy is not a financial model. It is a best case scenario dressed up as a projection.

    Step 3 — Rebuild every expense line from scratch.

    Do not accept the seller’s expense numbers. Go line by line and ask yourself one question for each item. Is this what I would actually pay? Here is what to examine:

    Property taxes: Call the county assessor and confirm the current tax bill. Ask whether a sale would trigger a reassessment. In some states a sale resets the assessed value and your tax bill goes up significantly.

    Insurance: Get your own quote before you make an offer. Do not use the seller’s number.

    Management: If you are not self managing add 8 to 12% of gross revenue as a management fee regardless of whether it is in the current expenses. If you are self managing, add it anyway and then decide if the deal still works. Because someday you will not want to self manage and you need to know the park can support that cost.

    Maintenance: Industry standard is 5 to 8% of gross revenue for a well maintained park. If the seller is showing less than that ask why. If the park has deferred maintenance budget more.

    CapEx reserve: This is the one most buyers skip entirely. Every major system in an RV park has a finite lifespan. A healthy CapEx reserve is typically 3 to 5% of gross revenue set aside annually for future capital needs. If the seller has no CapEx in their expenses they have been withdrawing equity from the property and handing you the bill.

    Utilities: Get the actual utility bills for 24 months. Not the seller’s estimate. The actual bills.

    Payroll: Get the actual payroll records. Know who is on payroll, what they make, and whether any of them are family members being compensated below or above market.

    Step 4 — Add your debt service.

    This is where most deals either work or fall apart. Take your actual financing terms, the real loan amount, the real interest rate, the real payment, and model it against the NOI you just rebuilt. Not the seller’s NOI. Yours. The debt service coverage ratio should be at least 1.25. I want to see 1.5 or above before I feel comfortable.

    Step 5 — Model the seasonality.

    Build a 12 month cash flow projection, not just an annual total. Map revenue and expenses month by month. Identify your worst cash month. Make sure you have enough reserves to cover it. A park that generates 80% of its revenue in three months needs a financial cushion that most buyers do not account for until they are sitting in month 9 with an empty park and a full expense load.

    Step 6 — Stress test the assumptions.

    Run the numbers at 10% lower revenue than your projection. Run them at 10% higher expenses. If the deal still works under those scenarios you have a margin of safety. If it only works when everything goes exactly as planned, it is too thin.

    When you have done all six of those steps you have your pro forma. Not the seller’s version. Yours. Built from real numbers, real costs, and assumptions that reflect what this park will actually look like under your ownership.

    That is the number that tells you what the deal is worth. And that is the only number that matters when you are deciding whether to make an offer.

    The seller’s pro forma tells you what they want you to believe. Your pro forma tells you what you are actually buying.

    If you want to go deeper on what to look for before you close; (and to protect yourself) you might want to pickup a copy of my $49 book “From Offer to Operations: The Complete RV Park Investor’s Guide”. This guide covers exactly this and a lot more, and it could save you from a very expensive mistake!

    You can get it direct here: https://wendipvifinancial.gumroad.com/l/kqmyb

    Or if you prefer Amazon has it too, just search author Wendi Rook.

    ~Wendi | Fractional CFO | PVIFinancial.com

    If you liked that one, read this next “What is NOI and How to Find the Real Number in an Acquisition”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • What Your P&L Is Trying to Tell You Before You Buy

    What Your P&L Is Trying to Tell You Before You Buy

    Every seller hands you a P&L. Most buyers glance at the revenue number, nod, and move on. That’s a mistake that can cost you everything.

    A P&L is not just a scorecard of what a business earned. It’s a story. And if you know how to read it, that story will tell you whether the deal in front of you is as good as it looks, better than it looks, or a disaster waiting to happen.

    Here’s what to look for before you make an offer.

    Revenue Trends Matter More Than Revenue Totals

    A business that did $800,000 last year sounds great. But was that up from $600,000 the year before or down from $1.2 million? Direction matters as much as the number itself. Always ask for two to three years of P&Ls so you can see the trend, not just a snapshot. A business in decline can still show impressive trailing numbers while the foundation is quietly crumbling underneath.

    Expense Lines Tell You How the Business Was Really Run

    Look at every expense category and ask whether it makes sense for the size and type of business. Payroll as a percentage of revenue, cost of goods as a percentage of revenue, marketing spend, maintenance, utilities. If any category looks unusually low compared to industry norms ask why. Sometimes expenses are being deferred, maintenance skipped, staff underpaid, or costs run through a different entity entirely. Low expenses on paper can mean a capital problem waiting for you on day one of ownership.

    One Time Items Can Inflate the Picture

    Sellers love to show you their best year. What they don’t always volunteer is that their best year included a one time contract, an insurance payout, a PPP loan that hit as income, or a related party transaction that won’t repeat. Always ask what was unusual about any year that looks significantly better than the others. Normalized earnings, what the business actually produces in a typical year, is what you’re buying.

    Owner Compensation is Almost Never What It Appears

    In a small owner operated business the owner’s salary, or lack of one, dramatically affects what the P&L shows. Some owners pay themselves very little and run personal expenses through the business. Some pay themselves above market to reduce taxable income. You need to recast the financials with a fair market owner salary to understand what the business actually earns after replacing the owner’s labor. This is called a recasted or adjusted P&L and it’s the number that should drive your valuation.

    Gross Margin is Your Early Warning System

    Gross margin is revenue minus the direct cost of delivering that revenue. It tells you how efficiently the business converts sales into profit before overhead. If gross margin is shrinking year over year it means either prices aren’t keeping up with costs or the cost of delivery is rising. Either way it’s a problem that gets worse after you own it, not better.

    What the P&L Can’t Tell You

    Here’s the part most buyers miss. A P&L only shows you what was recorded. If bank accounts weren’t connected, if expenses were paid in cash, if revenue was deposited without being invoiced, none of that shows up. A clean looking P&L on a poorly kept set of books is not a clean business. It’s a clean looking document sitting on top of an unknown mess.

    This is why underwriting a deal means going beyond the P&L. Bank statements, tax returns, reconciliation history, and a proper review of the books behind the numbers will tell you far more than the summary document the seller hands you at the first meeting.

    The P&L is where the conversation starts. Not where it ends.

    If you’re looking at a deal right now and want a second set of eyes on the numbers, that’s exactly what I do. I offer a free initial review. Let’s talk.

    ~Wendi | Fractional CFO | PVIFinancial.com

    Click here to read: “The Hidden Financial Risk of Buying a Mom-and-Pop Operation”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • Your Bank Balance is Lying to You

    Your Bank Balance is Lying to You

    This isn’t a hypothetical. This is a real story about a real business owner who almost let her company slip through her fingers because of one habit that’s more common than you’d think.

    She was running her business by her bank balance.

    Every morning she’d check what was in the account, decide what she could spend, pay what felt urgent, and move on. No budget. No forecast. No real picture of what was coming in or going out beyond what she could see on her phone screen.

    For a while it worked. Business was good, work was flowing, and the balance stayed healthy enough that nothing felt alarming. But then the slow season hit.

    In her industry slow periods are normal and expected. But because she had never tracked her cash flow or planned around the seasonal dip, she had no idea it was coming until it was already there. Equipment loan payments didn’t slow down just because new work did. Payroll didn’t pause. Fixed expenses kept showing up like clockwork while the incoming revenue slowed to a trickle.

    So she did what a lot of business owners.

    She reached for the credit cards.

    By the time I came in the business had racked up credit card debt just to cover normal operating expenses. And the worst part was none of it was necessary. The slow period was predictable. The cash crunch was avoidable. But without a system to see it coming there was no way to prepare for it.

    The first thing we did was build a 90 day cash flow forecast.

    Not complicated. Not fancy. Just a clear picture of every dollar expected to come in and every dollar expected to go out over the next three months. When we laid it out she could see exactly where the gaps were, when new work would hit the account, and how to sequence her payments to get ahead of the debt instead of just treading water.

    She signed new work right around that time and with the forecast in place she could see exactly how to deploy that revenue strategically. Within 90 days she had paid off the credit card debt, cleared past due balances that had been lingering, and walked into the next quarter with cash in reserve for the first time in a long time.

    The credit card debt was the cost she could measure.

    The stress, the sleepless nights, the decisions made from a place of panic instead of clarity, that cost doesn’t show up on a P&L but every business owner who has been there knows exactly what it feels like.

    A 90 day cash flow forecast is one of the most valuable tools I build for my clients. It’s not complicated and it doesn’t take too long but the visibility it gives you changes everything. Running your business without one is like driving at night with no headlights and hoping the road stays straight.

    If you’re running your business by your bank balance right now you’re not alone. But you don’t have to stay there.

    I offer a free initial financial review. Let’s talk.

    ~Wendi | Fractional CFO | PVIFinancial.com

    Click here to read “What is a Fractional CFO and Does Your Small Business Need One”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • Nobody talks about the month after they closed on their RV park.

    Nobody talks about the month after they closed on their RV park.

    They post the keys. They post the sign. They post the big smile in front of the entrance with the caption “we did it” and 200 people like it and leave fire emojis in the comments.

    What they do not post is the phone call two weeks later when the manager who knew every single tenant, every quirky electrical panel, every vendor relationship, and every unwritten rule about how that park actually ran, calls to say she is not coming back. She was loyal to the previous owner. Not to you.

    They do not post the septic inspection they skipped because the seller said it was fine and they were already two weeks past the deadline and everyone just wanted to close.

    They do not post the moment they sit down with the actual financials and realize that the previous owner had been running that park on a handshake with the same three vendors for fifteen years. The landscaper who charged half of market rate because they were old friends. The electrician who came out at midnight for almost nothing because he owed the owner a favor. The insurance broker who had grandfathered them into a policy that no longer exists for new buyers. Those numbers were real. They just were not your numbers. And nobody told you that before you signed.

    They do not post the moment they realize that what looked like a lean, efficiently run operation was actually an operation built entirely around one person’s relationships, one person’s sweat, and one person’s decades of accumulated goodwill that evaporated the day the deed transferred.

    Nobody posts that part.

    I have talked to buyers who are living that story right now. Not one or two. Several. And here is what they all have in common. They are not careless people. They are not inexperienced people. They did their research. They read the books. They listened to the podcasts. They underwrote the deal three different ways and it cash flowed every time.

    But they made their final decisions while they were excited. And excitement is the most expensive state of mind in commercial real estate.

    When you are excited you round up on revenue and round down on expenses. When you are excited the manager seems dependable and the infrastructure seems solid and the seller seems trustworthy and the market seems strong. When you are excited you see the upside and you file the concerns away under “we will figure it out.”

    And then you close. And the excitement fades. And the business does not care about your excitement at all. It just needs to be run.

    Here is the thing nobody tells you before you buy your first RV park.

    The deal does not hurt you. The assumptions do.

    You assumed the revenue would hold. You assumed the manager would stay. You assumed the expenses reflected reality. You assumed the NOI on the flyer was built the same way you would build it. You assumed the infrastructure was as solid as it looked on the surface tour. You assumed that what worked for the previous owner under their cost structure and their debt load and their management style would work the same way for you.

    And every single one of those assumptions felt completely reasonable at the time.

    This is not a story about bad deals. Most of the parks I see are decent assets. The land is real. The income is real. The demand is real. This is a story about what happens when someone buys a business without a clear and honest picture of what it actually costs to run it under new ownership, with new debt, and without the institutional knowledge that walked out the door at closing.

    The gap between the seller’s story and your reality is where deals go sideways. Not at closing. After.

    The buyers who do well are not smarter than the ones who struggle. They are not luckier. They do not have some special access to better deals. They just had someone in their corner before they signed who was willing to tell them the uncomfortable version of the story. Someone who rebuilt the NOI from scratch instead of accepting it. Someone who asked the hard questions about the manager and the infrastructure and the revenue mix before it was too late to walk away or renegotiate.

    Someone whose job it was to be the calm voice in the room when everyone else was caught up in the excitement of the deal.

    If you are looking at a park right now and something feels off but you cannot quite put your finger on it, that feeling is worth paying attention to. It is usually your gut doing the underwriting your spreadsheet missed.

    And if you want someone to look at the numbers with you before you decide, that is exactly what I do.

    ~Wendi | PVI Financial | Fractional CFO and Bookkeeping Services for Small Business and Outdoor Hospitality

    Read this next “The Hidden Financial Risks of Buying a Mom and Pop Operation”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • The 5 Things Your Bookkeeper Should Be Telling You But Isn’t

    The 5 Things Your Bookkeeper Should Be Telling You But Isn’t

    Most small business owners assume that if they have a bookkeeper, their finances are under control. The bills are getting paid, the receipts are getting entered, and somebody is reconciling the bank account every month. That’s enough, right?

    Not even close.

    You can read “What Good Bookkeeping Actually Looks Like” here.

    A bookkeeper records what happened. That’s their job and a good one does it accurately and consistently. But recording history is not the same as helping you understand it, act on it, or use it to grow. And if your bookkeeper is only doing the first part, you’re leaving the most valuable piece on the table.

    Here are five things your bookkeeper should be telling you but probably isn’t.

    Your Cash Flow is About to Get Tight

    A good bookkeeper doesn’t just reconcile last month, they’re looking ahead. If your receivables are slow, your payables are stacking up, and your bank balance is about to feel it, you should know that before it happens, not after. If nobody is flagging upcoming cash crunches for you, you’re flying blind every single month.

    Your Margins Are Shrinking and Here’s Why

    Revenue going up but profit not keeping pace? That’s a margin problem and it shows up in the numbers before you feel it in your gut. Your bookkeeper should be comparing your gross margin month over month and flagging when expenses in a specific category are creeping up. If they’re just entering transactions without analyzing trends, you’re missing the early warning system your business needs.

    You Have a Revenue Concentration Problem

    If the majority of your revenue is coming from one client, one location, one revenue stream, or one season, that’s a risk. A bookkeeper who understands your business should be able to see that in your P&L and bring it to your attention. Diversification isn’t just a strategy conversation, it starts with knowing what your numbers actually show.

    Your Books Aren’t Audit Ready

    Most business owners don’t think about this until they need financing, attract a buyer, or get a letter from the IRS. By then it’s too late to fix things cleanly. Your bookkeeper should be maintaining your file as if someone could walk in tomorrow and ask to see everything. Reconciled accounts, documented transactions, clean categorization, no mystery balances sitting unresolved for months.

    You’re Leaving Tax Deductions on the Table

    A bookkeeper who is paying attention to your business will notice things. Equipment that should be depreciated. Home office expenses that aren’t being tracked. Mileage that’s never recorded. Vehicle use that’s partially business. These aren’t aggressive tax strategies, they’re legitimate deductions that disappear if nobody is watching for them. Your bookkeeper should be flagging these throughout the year, not leaving it all for your CPA to sort out in April.

    So What’s the Difference?

    The difference between a bookkeeper and a fractional CFO is exactly this. A bookkeeper maintains the record. A fractional CFO uses the record to help you run a better business. They bring you the insights, flag the risks, and help you make decisions based on real data instead of gut feel.

    If you’ve never had someone in your corner doing that, you don’t know what you’re missing. And your bottom line is probably feeling it.

    Want to know what that level of financial support actually looks like for your business? I offer a free initial review. Let’s talk.

    ~Wendi | Fractional CFO | PVIFinancial.com

    Click here to read “What is a Fractional CFO and Does Your Small Business Need One?”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • The Number That Tells You If You’re Overpaying for an RV Park Before You Make an Offer

    The Number That Tells You If You’re Overpaying for an RV Park Before You Make an Offer

    Most buyers look at the asking price, see the NOI on the broker’s flyer, do some quick math, and decide the deal makes sense. I get it. The numbers look clean. The cap rate looks reasonable. The cash flow looks solid.

    But here is the thing. That is not underwriting. That is the seller’s story. And the seller’s story is always the best version of the truth.

    The number that actually tells you whether you are overpaying is not on any flyer. You have to build it yourself. And most buyers never do.

    What most buyers actually do

    They take the NOI the broker provides, divide it by the asking cap rate, and decide if the price feels right. Maybe they run it through a quick calculator. Maybe they check the debt service and see that it cash flows on paper.

    That is it. Deal made.

    And then six months after closing they are sitting at their kitchen table wondering why the numbers do not look anything like what they were shown. Not because they were lied to. Because nobody rebuilt the numbers honestly before they signed.

    The number that actually matters

    Your reconstructed NOI. Not the seller’s NOI. Yours.

    Built from verified income, real vacancy, market rate management costs, honest CapEx, accurate expenses, and a debt structure you can actually survive. That number, divided by what you are paying, is the only cap rate that matters.

    Everything else is marketing.

    The three things that inflate almost every seller’s NOI

    I have underwritten a lot of RV park deals. And I see the same three things inflating the NOI on almost every single one.

    The first one is no management fee. The current owner self manages the park. They take no salary, they charge no management fee, and their expenses look lean and efficient. Except you are not them. If you plan to hire a manager, or if you ever want to sell this park to someone who will not self manage, that NOI is overstated by $40,000 to $60,000 a year on a park doing $500,000 in revenue. That is not a small number.

    The second one is deferred CapEx. The seller has not put meaningful money back into the property in years. Roads, bathhouses, electrical, roofs, equipment. None of it shows up as an ongoing expense because they have just been letting things age. But you are going to inherit all of it. And in your first few years of ownership you will pay for every dollar they did not spend.

    The third one is below market expenses. Long term vendors, family deals, owner relationships that disappear the day you close. The insurance agent who gave them a deal because they have been friends for 20 years. The maintenance guy who works cheap because the owner does half the work himself. Those numbers are not your numbers.

    What the reconstructed NOI usually looks like

    Let me give you a real example of how this plays out.

    A park is advertised at a 9% cap rate. Looks great on paper. Buyer gets excited. But when you rebuild the NOI honestly, adding a market rate management fee, normalizing CapEx, adjusting the vendor expenses to what a new owner would actually pay, and running real vacancy numbers, that 9% cap rate becomes a 5.5% cap rate.

    At the asking price that is a completely different deal. At a 5.5% cap rate you are now overpaying by hundreds of thousands of dollars for the same cash flow. And you will not find that out until after you close.

    That is not a hypothetical. That is what I see on a regular basis.

    This is the sentence I want you to write down:

    The price you pay is permanent. The NOI you inherit is not.

    The price you agree to on day one is locked in. You cannot go back and renegotiate it when the numbers do not pan out. But the NOI is not fixed. It can go up and it can go down, and the seller has every incentive to show you the version where it goes up.

    Your job before you make an offer is to figure out what the NOI actually looks like under your ownership, with your costs, your management structure, and your debt. Not the seller’s version. Yours.

    That reconstructed NOI is the number that tells you if you are overpaying. And it is the only number that matters.

    If you want help rebuilding the numbers on a deal you are looking at before you make an offer, that is exactly what I do – Acquisition Underwriting for RV parks. Reach out at pvifinancial.com before you sign anything.

    ~Wendi | Fractional CFO | PVIFinancial.com

    If you liked this, read this next “What is NOI and How to Find the Real Number in an Acquisition”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • The One Financial System Every RV Park Owner Needs Before They Close

    The One Financial System Every RV Park Owner Needs Before They Close

    Set this up before day one and thank yourself later

    In the RV park acquisition community there’s a pattern I see over and over again.

    Buyers spend months doing due diligence. They verify the T12, they walk the property, they review the lease agreements and utility infrastructure and staffing model. They are thorough, careful, and smart.

    And then they close, and they have absolutely no financial system in place to manage the asset they just bought.

    The books are a mess from the transition. The bank accounts are commingled. Nobody knows what the first month actually produced because there’s no baseline reporting structure. And by the time they figure it out they’re already three months in and flying blind on a multi-million dollar investment.

    It’s one of the most common gaps I see in new acquisitions. And it’s completely avoidable.

    Here’s the financial system every RV park owner needs to have in place before, or immediately after, they close.

    Step 1: Get your banking structure right from day one

    Before you receive a single dollar of revenue you need at least three separate bank accounts:

    Operating account. This is your day to day account. Revenue comes in here. Operating expenses go out from here. Payroll, utilities, supplies, management fees, all paid from this account.

    CapEx reserve account. Every month transfer 5% of gross revenue into this account and don’t touch it for anything other than capital improvements and major repairs. This account is your future roof, your aging electrical hookups, your road resurfacing. Fund it from month one even when everything looks fine.

    Tax reserve account. Set aside a percentage of net income every month for taxes. The exact percentage depends on your entity structure and tax situation, so talk to your CPA, but a general starting point is 25-30% of net profit. Nothing creates more stress than a surprise tax bill you didn’t plan for.

    This three account structure eliminates more financial stress than almost anything else I recommend. When your operating account tells you what you actually have available to spend, not a commingled number that includes your CapEx and tax reserves, you make better decisions. It will also save you from paying expensive bookkeeping clean up fees.

    Step 2: Set up your bookkeeping system immediately

    Get QuickBooks Online or your preferred bookkeeping software set up and connected to your bank accounts before you close or within the first week after. Every transaction from day one should flow through your books.

    I know this sounds basic but new owners often let the first month or two slide because they’re busy getting the operations figured out. Then they have a backlog of transactions to clean up and no clean baseline to measure performance against.

    Your first month of ownership is your most important baseline. Capture it cleanly.

    Set up your chart of accounts to reflect the specific revenue and expense categories of an RV park, including site type revenue, utility income, amenity fees, staffing, utilities, maintenance, management fees, insurance, and debt service as separate line items. A generic chart of accounts designed for a retail business will not give you the visibility you need.

    Step 3: Build your pro-forma tracking document

    Take the pro-forma you used during underwriting and turn it into a living monthly tracking document. Every month you enter your actual results alongside your projections and calculate the variance.

    This document is your single most important management tool in year one. It tells you whether you’re on track, where you’re ahead, and where you’re behind, and it forces you to ask why on both sides.

    Ahead on occupancy? Great, what drove that and can you replicate it? Behind on rate? Why, is it a pricing issue, a mix issue, or a market issue? Every variance has a story and understanding the story is how you manage the asset instead of just watching it.

    Step 4: Establish your monthly reporting rhythm

    Pick a day and commit to reviewing your financials every single month on that day without fail the 10th of the month works well for most operators.

    Your monthly review should cover your P&L for the month compared to pro-forma and prior year, your cash position and 30/60/90 day forecast, your occupancy and rate by site type compared to pro forma, your expense ratio and any line items running above budget, and your CapEx reserve balance and any upcoming capital needs.

    The whole review should take 30 to 60 minutes if your books are clean and your reporting is set up properly. That’s one hour a month to stay on top of a multi-million dollar investment. There is no better return on your time.

    Step 5: Know your numbers before your lender asks for them

    If you have a loan on the property, seller carry, bank financing, or otherwise, your lender will likely require periodic financial reporting. But more importantly you want to be the person who knows your numbers cold before anyone asks.

    Lenders get nervous when borrowers don’t know their own financials. They get confident when a borrower calls them proactively and says here’s where we are, here’s what’s working, here’s what we’re watching. That relationship dynamic matters, especially if you ever need flexibility from your lender.

    Know your numbers. Own your numbers. Be the most informed person in the room about your own asset.

    The bottom line

    The financial system I just described is not complicated. It doesn’t require a finance degree or expensive software. What it requires is intentionality, setting it up before the chaos of ownership sets in and committing to maintaining it consistently.

    The RV Park operators who build real lasting wealth are the ones who treat the financial side of their business with the same seriousness as the operational side. They know their numbers. They track the right metrics. And they never let more than 30 days go by without a clear picture of where they stand.

    You can absolutely build this yourself. And if you want help setting it up, or want someone to manage it for you so you can focus on running the park, that’s exactly what I help new owners build. I’d love to work with you from day one.

    Visit me at https://www.pvifinancial.com and let’s talk about getting your financial foundation right from day one.

    ~Wendi | PVI Financial | Fractional CFO & Bookkeeping Services for Small Business & Outdoor Hospitality

    If you found value in that one, click here to read “What Good Bookkeeping Actually Looks Like and Why Most Small Businesses Don’t Have It”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • Why Your RV Park’s Best Season Can Also Be Its Biggest Financial Risk

    Why Your RV Park’s Best Season Can Also Be Its Biggest Financial Risk

    And what to do about it before the shoulder season hits

    Ask any RV park owner what their favorite time of year is and they’ll tell you summer. The sites are full, the revenue is flowing, the energy is high and everything feels great.

    And then September arrives.

    For a lot of RV park owners the shoulder season is when the financial chickens come home to roost. The cash that felt abundant in July suddenly has to stretch a lot further. Expenses don’t drop as fast as revenue does. Payroll still runs. Debt service still runs. Insurance still runs. And if you didn’t manage your peak season cash wisely you can find yourself in a surprisingly tight spot on a property that just had its best revenue months of the year.

    I call this the peak season trap. And it catches more new owners than almost anything else.

    Here’s how to avoid it.

    Understand your revenue curve before you close

    Every RV park has a seasonality profile. Some are heavily summer weighted with 60-70% of annual revenue coming in May through August. Others have a more even distribution with strong spring and fall shoulder seasons. Some have winter demand driven by snowbirds or proximity to ski areas.

    Before you close on any RV park acquisition you should understand exactly what the monthly revenue distribution looks like over a full year. Don’t just look at the annual T12 number, break it down month by month.

    Ask for monthly revenue data going back at least two years. Map it out. Understand when the peaks are, when the valleys are, and how deep those valleys go. That monthly revenue curve is your cash flow roadmap for the first year of ownership.

    Build your budget around the valleys, not the peaks

    This is the mindset shift that separates financially savvy operators from ones who get caught short.

    When you’re in peak season it’s tempting to make spending decisions based on current cash flow. Revenue is strong, the bank account looks healthy, and there are always improvements to make and expenses to approve.

    But your peak season cash has to carry you through the valley. Every dollar you spend in July is a dollar that isn’t available in November.

    Build your annual budget starting from your lowest revenue month. Make sure your fixed costs, debt service, payroll, insurance, utilities, can be covered in your worst month with your lowest expected revenue. Everything above that is your operating cushion and your growth fund.

    If your worst month revenue can’t cover your fixed costs you have a structural problem that needs to be addressed, whether that’s adding long term tenants for stable monthly income, reducing fixed costs, or building a larger cash reserve before you close.

    Use peak season to fund your reserves

    Peak season is not just when you make money. It’s when you build the financial cushion that protects you the rest of the year.

    Here’s the system I recommend for every RV park owner going into their first peak season:

    Every week during peak season calculate what percentage of your monthly revenue target you’ve hit. Once you’ve covered your projected monthly operating expenses, debt service, and CapEx reserve contribution, every additional dollar should be split between your tax reserve and your operating cash cushion.

    The goal is to exit peak season with enough cash in your operating account to cover at least three months of fixed expenses. That cushion is your shoulder season safety net.

    If you hit that target and still have surplus cash, that’s when you think about reinvestment, improvements, or distributions. Not before.

    Watch your expense timing carefully

    One of the most common mistakes new RV park owners make is front loading expenses into peak season without thinking about the cash flow timing.

    You want to repave the entrance road. You want to upgrade the bathhouse. You want to add a new amenity. All of those are valid investments, but if you execute them during peak season you’re consuming cash at exactly the moment you should be building it.

    In general capital improvements and major discretionary expenses are better timed for the shoulder season or off season when your operations are quieter and your team has more bandwidth. Your cash will thank you.

    Plan for the transition before it happens

    Most new owners don’t start thinking about shoulder season until they’re in it. By then it’s too late to adjust.

    The time to plan for the shoulder season is during peak season, when revenue is strong and you have the mental space to think clearly. Build your shoulder season budget in July. Know exactly what your cash position needs to look like on September 1st to get you comfortably through to the following spring.

    Then manage toward that number intentionally for the rest of peak season.

    The bottom line

    Seasonality is one of the great joys of the outdoor hospitality business. There is something genuinely wonderful about a full park on a summer weekend. But it’s also one of the great financial risks, because the math of a seasonal business is unforgiving if you’re not managing it intentionally.

    The owners who thrive long term are the ones who use their best months to protect their worst months. They budget from the valley up, they build their reserves during peak season, and they never let a strong July lull them into decisions that hurt them in November.

    You can absolutely do this. And if you want a financial partner who tracks your seasonality with you, builds your cash flow forecast, and makes sure you’re set up for every season, I’d love to work with you.

    Visit me at https://www.pvifinancial.com to get started with a free Financial Health Check.

    ~Wendi | PVI Financial | Fractional CFO & Bookkeeping Services for Small Business & Outdoor Hospitality

    If this resonates you will want to read this next: “Why Profitable Businesses Run Out of Cash”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • How to Analyze a Seller Carry Deal and Whether the Terms Actually Work for You

    How to Analyze a Seller Carry Deal and Whether the Terms Actually Work for You

    Because seller financing sounds great until you run the actual numbers

    If you spend any time in the creative real estate space you hear about seller carry deals constantly. And for good reason, when they’re structured well they can be genuinely transformative. Lower barriers to entry, flexible terms, no bank approval required, and a motivated seller who wants the deal to work as much as you do.

    But here’s what doesn’t get talked about enough. Seller carry deals can also be structured in ways that look attractive on the surface and quietly destroy your returns underneath. The terms matter enormously and not all seller financing is created equal.

    I’ve analyzed a lot of these deals. Here’s how I think through them and what I look for before I ever say yes.

    What is a seller carry deal?

    For anyone newer to the concept, a seller carry deal, also called seller financing or an owner carry, is when the seller of a property acts as the lender instead of a bank. Rather than you going to a bank to borrow the purchase price the seller carries a note and you make payments directly to them over time.

    The appeal is obvious. No bank qualification process, potentially lower interest rates than conventional financing, more flexible terms, and a seller who is often motivated to make the deal work because they’re receiving monthly payments rather than a lump sum.

    The risk is equally obvious once you understand it. The terms are entirely negotiable which means they can be structured in your favor or against you depending on how well you understand what you’re agreeing to.

    The four numbers that determine whether a seller carry deal actually works

    Before I get excited about any seller carry deal I run four numbers. All four have to make sense together or I keep negotiating or I walk.

    1. The interest rate

    Seller carry deals typically come with interest rates somewhere between 5% and 8% in today’s market though this varies widely. The rate matters because it directly determines your monthly payment and therefore your cash flow.

    A $3,000,000 seller carry note at 5% interest only for 10 years costs you $12,500 per month. The same note at 7% costs you $17,500 per month. That $5,000 monthly difference is $60,000 per year that comes directly out of your cash flow.

    Always model the payment at the actual proposed rate and make sure your NOI can absorb it with adequate cushion. Which brings me to the second number.

    2. The debt service coverage ratio

    The DSCR is especially critical in seller carry deals because the terms are flexible and sellers sometimes propose payment structures that look affordable without being sustainable.

    Divide your adjusted NOI by your annual debt service. I want to see at least 1.5x coverage, meaning my NOI covers the payments by 50%. Anything below 1.25x and I’m either renegotiating the terms or walking away.

    A seller carry deal with a 1.05x DSCR looks like it works on paper. But one bad month, one unexpected expense, one occupancy dip, and you’re behind on your payments to the seller. That’s not a position you want to be in.

    3. The balloon payment

    Most seller carry deals have a balloon payment, a point in time where the remaining balance becomes due in full. Common balloon terms are 3, 5, 7, or 10 years.

    The balloon is where a lot of buyers get into trouble. They structure a deal that cash flows well for 5 years and then discover they can’t refinance or sell at the balloon date under favorable conditions. Maybe the market shifted. Maybe their credit situation changed. Maybe interest rates moved and conventional financing no longer pencils.

    Before you sign any seller carry agreement you need a clear plan for what happens at the balloon date. Can you refinance with a conventional lender at that point? Will the property have realistically appreciated enough to sell? Can you negotiate an extension with the seller if needed?

    Never assume the balloon will take care of itself. Plan for it from day one.

    4. The amortization schedule

    This one surprises a lot of newer investors. A seller carry note can have an interest only payment structure, a fully amortizing structure, or something in between. The difference matters enormously for your cash flow and your equity building.

    An interest only note means every payment goes entirely to interest and your principal balance never decreases. Your monthly payment is lower which helps cash flow but you’re not building equity through paydown and you’ll owe the full original balance at the balloon date.

    A fully amortizing note means each payment includes both principal and interest. Your payment is higher but your balance decreases over time and you’re building equity with every payment.

    Neither structure is automatically better. It depends on your cash flow situation, your hold period, and your exit strategy. What matters is that you understand exactly what you’re agreeing to and have modeled both scenarios.

    The terms that are negotiable and the ones that matter most

    Everything in a seller carry deal is negotiable. Here are the terms worth fighting hardest for:

    The interest rate is obviously important but it’s not always the most important. A slightly higher rate with a longer balloon and no prepayment penalty can be better than a lower rate with a short balloon and a penalty for paying it off early.

    The prepayment penalty is one people often overlook. If you plan to refinance or sell before the balloon date a prepayment penalty can cost you significantly. Always ask about prepayment terms and try to negotiate them out entirely or limit them to the first year or two.

    The balloon date itself is worth negotiating hard on. Longer is almost always better because it gives you more time to stabilize the asset, build your cash reserves, and position yourself for a favorable refinance or sale.

    A real world example

    Let me walk you through how I analyzed the seller carry on an RV park deal recently.

    The property had an adjusted NOI of approximately $400,000. The seller carry was structured at approximately $220,000 in annual debt service on a $4,500,000 purchase price.

    DSCR: $400,000 divided by $220,000 equals 1.82x. Healthy coverage with good cushion.

    Cash flow after debt service: $180,000 annually or $15,000 per month.

    After a 5% CapEx reserve of $25,000 annually the free cash flow was $155,000 per year.

    The terms worked mathematically. The deal ultimately didn’t close for reasons unrelated to the financing structure but the seller carry terms themselves were workable and the numbers supported them.

    That’s what a properly analyzed seller carry deal looks like. The numbers tell a clear and consistent story at every level.

    The bottom line

    Seller carry deals are a powerful tool when they’re structured correctly and analyzed rigorously. They can open doors that conventional financing closes and create win-win situations for both buyer and seller.

    But the flexibility that makes them attractive is the same flexibility that can get you into trouble if you don’t know what you’re analyzing. Know your four numbers. Understand your balloon. Negotiate your terms. And make sure the deal works not just at closing but at every point in your hold period.

    If you want help analyzing the terms of a seller carry deal you’re looking at I would love to work through the numbers with you. That’s exactly the kind of analysis that can save you from a deal that looks good and isn’t, or give you the confidence to move forward on one that truly is.

    Visit me at https://www.pvifinancial.com and let’s look at your deal together.

    ~Wendi | PVI Financial | Fractional CFO & Bookkeeping Services for Small Business & Outdoor Hospitality

    Click here to read “I Have Analyzed Dozens of RV Park Deals, Here is What I Look At Before I Look At Anything Else”

    Click here to Download my free guide, The 5 Numbers Every RV Park Buyer Must Know Before Making an Offer

  • The Moment I Stopped Running My Business and Started Leading It

    The Moment I Stopped Running My Business and Started Leading It

    There’s a difference between running a business and leading one. It took me a while to figure out what that difference actually was.

    When you’re running a business you’re in it every single day. You’re the one answering the calls, putting out the fires, moving the money around, making every decision because nobody else can make it as fast as you can. You’re busy. You feel productive. And you’re completely exhausted.

    But here’s the thing about being that busy.

    Busy is not the same as forward momentum.

    Busy can actually be the thing that keeps you stuck.

    The shift happened for me when I finally got serious about my numbers. Not just checking the bank balance to see if I could make payroll or cover the next expense. Actually knowing my numbers. Understanding what was coming in, what was going out, what my margin looked like, where the leaks were, and where the opportunities were hiding.

    When I could see my business clearly for the first time I stopped reacting and started deciding. There’s a massive difference between those two things.

    Reacting means the business is driving you.

    Something happens and you respond. A slow month hits and you panic. An expense spikes and you scramble. You’re always one step behind the thing you’re supposed to be in charge of.

    Deciding means you’re driving the business. You see the slow month coming three months out and you’ve already adjusted. You know which expenses are creeping up before they become a problem. You’re not surprised by your own numbers because you actually know them.

    I know this because I lived it.

    I ran my own business for 10 years. When I finally got serious about the financial foundation everything changed. I was able to see where to scale, where to cut, and where the real value was being built. I didn’t just stabilize the business, I grew it to the point where I was able to exit on my own terms, happily, in 2023. Clean books didn’t just help me run the business better. They made it worth something to a buyer.

    That’s not a small thing. A buyer’s confidence lives and dies on your numbers. If you can’t show clean, accurate, well organized financials you are leaving money on the table at the closing table, period.

    And honestly it changes how you feel about your business too. The stress that comes from not knowing, from guessing, from hoping the bank balance holds, that stress is optional. It feels inevitable when you’re in it but it’s not. It’s just what happens when the financial foundation isn’t there yet.

    I work with business owners and investors who are smart, hardworking, and genuinely good at what they do. The ones who make the biggest leaps are almost always the ones who finally decide to get serious about their financial picture. Not because the numbers are magic but because clarity is.

    You can’t lead what you can’t see.

    If you’re still running your business instead of leading it, the numbers are usually where the answer is hiding.

    I offer a free initial financial review. Let’s talk.

    Click here to read “What Is a Fractional CFO and Does Your Small Business Need one”