PVI Financial

Category: RV Park & Outdoor Hospitality

  • 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

  • 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

  • Why Your Books and Your Guest Experience Are Actually the Same Thing

    Why Your Books and Your Guest Experience Are Actually the Same Thing

    Want to understand what good books actually look like first? Start here, “What Good Bookkeeping Looks Like”

    This one might surprise you.

    When most people think about bookkeeping they think about compliance. Taxes. Staying out of trouble. Necessary but boring back office stuff that has nothing to do with the actual guest experience.

    But here’s what I’ve seen over and over working with hospitality and outdoor property owners. The owners who have clean financial visibility make better decisions. And better decisions, almost without exception, lead to a better guest experience. Let me explain what I mean.

    When your books are a mess you make reactive decisions.

    You raise rates because you feel like you need more revenue, not because the data supports it. You cut maintenance because the bank balance looks low, not because it’s actually the right call. You delay an amenity upgrade because you’re not sure if you can afford it, even though the numbers might actually support it if you could see them clearly.

    Reactive decisions frustrate guests. They notice when maintenance slips. They notice when the pool equipment hasn’t been updated. They notice when your pricing feels random compared to the experience you’re delivering.

    Now flip it.

    When your numbers are clean and current you can see exactly what each revenue stream is generating. You know your cost per occupied site. You know which amenities are pulling their weight and which ones aren’t.

    Think about it this way. A $5 per night rate increase on a 100 pad park running at 75% occupancy is 75 occupied sites per night. That’s $375 per night, $11,250 per month, $135,000 per year in additional gross revenue straight to your bottom line. Small moves on rate add up fast when you have the volume to back them up. But if you don’t know your data, you can’t even consider this logically, and if you price by gut feel instead of numbers you may find your guests heading down the street to someone who figured it out.

    That clarity lets you make intentional decisions instead of reactive ones. And intentional decisions protect and improve the guest experience because you’re investing where it actually matters instead of cutting blindly or spending without a plan.

    There’s another side to this too.

    Industry leaders in the outdoor hospitality space talk about the danger of mixing investor language with guest language. When owners are so focused on squeezing NOI and talking about yield optimization, guests start to feel like a transaction instead of a vacationer. The best operators are the ones who use the financial data internally to run a smarter business while still showing up for guests as a place that genuinely cares about the experience.

    Clean books make that possible. They give you the confidence to invest in the right places because you actually know what you can afford and what will move the needle.

    Your guest experience is a reflection of how well you run your business financially.

    The two are not separate.

    If your books can’t tell you where to invest, how to price, or which parts of your operation are profitable, you’re making those decisions blind. And your guests will eventually feel it.

    Want to know what financial clarity actually looks like for a hospitality property? I offer a free initial review. Let’s talk.

    Ready to look at the numbers behind your property? Read this next, “What Squeezed NOI Actually Looks Like”

  • What Squeezed NOI Actually Looks Like (And How to Fix It)

    What Squeezed NOI Actually Looks Like (And How to Fix It)

    New to NOI? Read this first, What is NOI, then come back here.

    You’ve probably heard the term NOI thrown around constantly in the investment space. Net Operating Income. The number everyone uses to value a property, qualify for financing, and measure performance.

    But what happens when NOI stops growing and starts shrinking?

    That’s called squeezed NOI and it’s happening across the outdoor hospitality space right now. Revenue softening while expenses keep climbing. The gap between what comes in and what goes out getting tighter every month. And a lot of new owners who bought at peak valuations in 2020 to 2022 are now staring at a financial picture that looks nothing like what the pro forma said.

    So what does squeezed NOI actually look like in real life?

    It looks like this:

    Your occupancy is solid but your net is shrinking. You raised rates a little but utilities, insurance, payroll and maintenance ate the increase before it hit the bottom line. You’re busy but you don’t feel profitable. Your bank balance looks ok but you can’t figure out where the money went.

    Sound familiar?

    Here’s what’s usually driving it:

    Expenses that were never properly tracked or categorized so you don’t even know where the leaks are. Rate structures that haven’t been pressure tested against actual cost increases. Revenue streams that are underleveraged, amenities, add-ons, extended stays, that are generating activity but not optimized for profitability. And books that can’t tell you which part of the business is making money and which part is dragging everything down.

    Here’s how you fix it:

    First you have to be able to see it clearly. That means clean books, real numbers, and a P&L that breaks down revenue and expenses by category, not just one big blended picture. You cannot fix what you cannot measure.

    Second you look at every expense line and ask whether it’s fixed, variable, or discretionary. Fixed costs are what they are. Variable and discretionary costs are where you find the margin.

    Third you look at revenue per site, per night, per guest, and ask honestly whether you’re leaving money on the table. Most properties are. Not because owners are lazy but because they’re too busy operating to step back and analyze.

    Fourth you build a simple 12 month forward projection so you’re not reacting to the numbers every month, you’re anticipating them.

    This is exactly the kind of work a fractional CFO does. Not just recording what happened but helping you understand why it happened and what to do about it.

    Squeezed NOI is a warning, not a death sentence. But you have to catch it early and you have to have the right financial visibility to act on it.

    If your books can’t tell you where your margin is going, that’s the first thing to fix.

    Questions about your NOI picture? I offer a free initial financial review. Let’s talk.

    ~Wendi | Fractional CFO | PVIFinancial.com

    If your NOI is getting squeezed there’s a good chance cash flow is feeling it too. Read this next: “Why Profitable Businesses Run Out of Cash and How To Make Sure Your’s Doesn’t”

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

  • The Hidden Financial Risks of Buying a Mom-and-Pop Operation

    The Hidden Financial Risks of Buying a Mom-and-Pop Operation

    You found the deal. You closed it. You’re fired up and ready to go.

    And then you open the books.

    If you’ve recently acquired a small business or hospitality property, an RV park, a resort, a retail operation, there’s a good chance you inherited more than you bargained for financially. Not because the seller was necessarily dishonest. But because most mom-and-pop operations were never run with clean books to begin with.

    Here are some of the most common things I find hiding in inherited QuickBooks files:

    🔴 Bank accounts that aren’t connected to the books. Multiple checking accounts, a savings account, credit cards, and only one of them actually flows through the accounting software. That means a significant portion of real business activity is either missing entirely or manually entered with no reconciliation. The P&L looks like it has expenses. But none of it can be verified. You can’t make good decisions on numbers you can’t trust.

    🔴 Payroll liabilities recorded incorrectly. Negative payroll liability balances are a red flag. It usually means someone was recording tax payments by going directly into the bank register instead of using the proper payroll workflow. The taxes may have actually been paid, but the books can’t prove it without a CPA reconciling IRS transcripts against what the software shows.

    🔴 Employee loans buried as business expenses. This one comes up more than you’d think. A loan to an employee gets quietly written off as an operating expense instead of being run through payroll as taxable compensation. The prior owner may have filed a tax return with that entry in it. Now it’s sitting in your inherited file. Know what’s in there before anyone touches it.

    🔴 Depreciation recapture exposure. When you buy an LLC outright you may be stepping into the prior owner’s accumulated depreciation, which means when those assets are eventually sold the IRS will recapture that depreciation as ordinary income regardless of who took the original deductions. This is a conversation to have with your CPA before you close, not after. Understanding what you’re buying and how it’s structured can significantly impact your long term tax picture.

    🔴 Balance sheet accounts that are pure fiction. Inventory balances from years ago never updated. Loans that were paid off at closing still showing as liabilities. Assets with no supporting documentation. A balance sheet that looks complete but reflects nothing about the real state of the business you just bought.

    So What Do You Do About It?

    Don’t panic and don’t start fixing things randomly. A wrong entry in the wrong place makes a mess worse.

    Get your closing statement and purchase agreement in hand before anyone touches anything. That document establishes what you actually bought, what liabilities you assumed, and what your opening balances should look like.

    Draw a clean line at your acquisition date. Archive the prior owner’s history. Build your books forward from day one of YOUR ownership with correct opening balances established by a CPA.

    And understand that this isn’t just a cleanup, it’s a new owner setup. One of the most important investments you’ll make in your first 90 days.

    The money you spent to acquire that business deserves a financial foundation that actually reflects reality. You can’t make smart decisions on rates, staffing, capital improvements, or exit strategy if your books are built on someone else’s mess.

    Get the foundation right first. Everything else flows from there.

    Questions about what you inherited? I offer a free initial file review. Let’s talk.

    ~Wendi | Fractional CFO | PVIFinancial.com

    Click here to read “What Good Bookkeeping Looks Like and Why Most Small Businesses Don’t Have It”

    Click here to read “How To Structure Your First 90 Days as a New RV Park Owner”

  • I Have Underwritten Dozens of RV Park Deals. Here is Exactly What I Look at Before I Look at Anything Else.

    I Have Underwritten Dozens of RV Park Deals. Here is Exactly What I Look at Before I Look at Anything Else.

    If you have been scrolling through RV park listings lately you already know the feeling. The photos look great, the location seems solid, and the revenue numbers the broker is showing you look attractive. So you start getting excited. You start running the math in your head. You maybe even start picturing yourself as the owner.

    And then you dig in and realize the deal is nothing like what it appeared to be on the surface.

    I have been there more times than I can count. I have underwritten RV park deals that looked incredible on a one page marketing flyer and fell completely apart under scrutiny. I have also passed on deals that looked rough on the outside and turned out to have real upside hiding underneath the surface numbers.

    After doing this work over and over the same framework keeps proving itself. Here is exactly what I look at before I look at anything else.

    The Revenue Mix Tells You Everything

    Before I look at a single expense I want to understand how the revenue is being generated. Specifically I want to know the breakdown between long term tenants, short term seasonal guests, and transient nightly guests.

    This matters more than most buyers realize. A park that generates 80% of its revenue from long term tenants looks stable on paper but carries significant risk. Long term tenants pay less per night, they are harder to remove if needed, and many lenders including SBA will not finance a park with that revenue composition. If you are planning to reposition the park toward higher paying short term guests you need to understand exactly what that transition looks like, how long it takes, and what happens to your cash flow during the process.

    A healthy revenue mix for most acquisition purposes is somewhere around 60% short term and transient combined with no more than 40% long term. If the numbers are flipped that is not automatically a dealbreaker but it is the first conversation you need to have.

    The Occupancy Number is Rarely What It Seems

    Sellers love to quote peak season occupancy. What you need is annual average occupancy by site type and by month. Twelve months of data minimum. Ideally two to three years.

    A park that runs at 95% occupancy in July and 20% in January is a very different investment than a park that runs at 70% occupancy year round. The blended annual average tells you the real story and it directly determines how you underwrite the income.

    Also ask how many sites are actually available for rent versus taken offline for storage, employee use, or owner personal use. I have seen parks quote 150 sites where 30 of them were permanently occupied by staff or family members generating zero revenue. That changes your effective inventory and your income projections significantly.

    The Seller’s NOI is a Starting Point Not a Destination

    Every broker and seller will present you with a net operating income figure. Your job is to treat that number as a starting point for your own investigation, not a conclusion.

    Here is what commonly gets left out of a seller’s NOI that you need to add back in as expenses before you can trust the number. Management fees are almost always missing if the owner is self managing. A professional management fee typically runs 8 to 12 percent of gross revenue. If you are not planning to self manage you need to include this. If you are planning to self manage you still need to include it because your time has value and you need to understand what the park looks like without you in it.

    Owner salary is another common omission. If the owner is working full time in the park and not paying themselves a salary the expenses are understated. Capital expenditure history is almost always missing. When was the last time the roofs were replaced, the bathhouses were renovated, the electrical was upgraded? Deferred maintenance shows up in the purchase price negotiation and in your first year of ownership.

    Legal and professional fees that spike in a single year are worth investigating. I have seen deals where a large legal fee appeared in one year of the financials that turned out to be related to a tenant dispute or regulatory issue that was never fully disclosed.

    Infrastructure is Where Deals Go to Die

    The physical infrastructure of an RV park is where deals go to die if you are not paying attention. Utility systems, septic, water, electrical, and roads are the unglamorous backbone of the operation and they are expensive to fix when they fail.

    Here is what I specifically investigate on every deal. Who owns the utilities? A park on city water and sewer is a very different risk profile than a park on a private well and septic system. Private systems require regular maintenance, have finite lifespans, and can come with significant regulatory requirements depending on the state. Find out the age of every major system, when it was last serviced, and what the estimated remaining useful life is.

    Roads and common areas are often overlooked. Gravel roads that have not been graded in years, drainage issues, and aging common area infrastructure all represent capital expenditure that needs to be budgeted. Walk the property on foot, not just in a car. The things you see on foot tell a completely different story than the aerial photos in the marketing package.

    The Real Estate and the Business are Two Separate Things

    One of the most common mistakes I see buyers make is evaluating the real estate and the business as one thing. They are not. You are buying both and they need to be evaluated separately.

    The real estate question is straightforward. What is the land worth, what are the comparable sales in the area, and is the property appropriately zoned for its current and intended use? Are there any title issues, easements, or encumbrances that affect the property?

    The business question is more nuanced. What systems are in place for reservations, guest management, and operations? Is there a management team or is everything dependent on the owner? What is the online reputation of the park on Google, Campendium, and The Dyrt? Reviews tell you what the financials cannot. They tell you whether guests are happy, whether the facilities are well maintained, and whether there are recurring issues that show up over and over in the comments.

    A park with strong financials and terrible reviews is a business that is heading in the wrong direction. A park with modest financials and excellent reviews is a business with real upside potential.

    The Lease and Permit Situation

    If the park is on leased land rather than owned land this is the first thing I want to understand. What are the lease terms, what happens at expiration, is there a right of first refusal, and what does the rent escalation look like over time? A 25 year lease with a first right of refusal is very different from a 5 year lease with no renewal option.

    Permits and licenses are equally important. Is the park operating with all required permits current and in good standing? Are there any open violations, pending regulatory actions, or zoning issues? In some states RV parks require specific operating licenses and the transfer of those licenses to a new owner is not always automatic. Find out before you close, not after.

    My Final Rule

    After doing this work across dozens of deals I have one rule that I always come back to. Never fall in love with a deal before you have verified the numbers yourself.

    The seller’s package is a marketing document. The broker’s pro forma is an optimistic projection. Your job as the buyer is to reconstruct the financials from scratch using verified data, apply your own expense assumptions, and determine what the property is worth to you at your required return, not what the seller thinks it is worth to them.

    If the deal still works after you have done that work it is worth pursuing. If it does not you just saved yourself from a very expensive mistake.

    That is the job. And if you want someone in your corner who has done this work on real deals and knows exactly what to look for, that is exactly what I do at PVI Financial.

    Reach out at pvifinancial.com and let’s take a look at what you are working with.

    And if you have not grabbed a copy of my book yet, From Offer to Operation: The Complete RV Park Investor’s Guide ($49), it covers the full acquisition and operations framework including a bonus report with 34 red flags to verify before you close. I am very confident you will learn something you had not thought of.

    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.

    Click here to read “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 is NOI? And How to Find the REAL Number in an Acquisition

    What is NOI? And How to Find the REAL Number in an Acquisition

    Because the number on the listing and the number that matters are often very different things

    If you’ve spent any time looking at RV parks, campgrounds, or commercial real estate you’ve seen the term NOI everywhere. Net Operating Income. It’s the number brokers lead with, sellers brag about, and buyers base their offers on.

    And it’s also one of the most manipulated numbers in a deal.

    I don’t say that to scare you. I say it because understanding how NOI gets inflated, and how to find the real number, is one of the most valuable skills you can develop as a real estate investor. It’s the difference between buying a great asset and buying a great story.

    Let’s break it down.

    What is NOI really?

    Net Operating Income is the income a property generates after operating expenses but before debt service, taxes, depreciation, and capital expenditures.

    The formula is simple:

    Gross Revenue − Operating Expenses = NOI

    A property with $738,000 in gross revenue and $338,000 in operating expenses has a $400,000 NOI. Simple right?

    Sure, until you start asking what’s actually in those two numbers.

    The revenue side and what to verify

    Sellers and brokers present gross revenue in the most favorable light possible. That’s not dishonest, it’s how deals get done. But your job as a buyer is to verify every dollar.

    Here’s what to look for on the revenue side:

    One time or non-recurring income. Did they have an unusually strong season last year due to a local event, a viral social media moment, or a competitor closing? One time revenue inflates the T12 and won’t repeat. Back it out.

    Owner managed revenue. If the current owner is personally managing the property and not taking a salary that income looks great on paper. The moment you hire a manager that expense hits and your NOI drops. Always underwrite a management fee even if the current owner doesn’t take one, a safe number to use would be 8-10% of gross revenue for an RV park or campground.

    Projected or pro forma revenue. Some listings include “projected” revenue from planned improvements or expansions that haven’t happened yet. That is not T12 income. It’s a dream. Underwrite only what the property is actually producing right now.

    Gross vs net revenue. If the property uses OTA platforms like Airbnb, Hipcamp, or Booking.com those platforms take 15-25% in commissions. Make sure you’re looking at net revenue after commissions, not gross bookings.

    The expense side and what gets left out

    This is where the real manipulation happens. Expenses get minimized, forgotten, or deliberately excluded to make NOI look bigger. Here’s what to watch for:

    Owner salary or management fee. As mentioned above. If the owner runs the property themselves and takes no salary add a market rate management fee back in. This alone can drop NOI by $50,000-$80,000 on a mid-size park.

    Deferred maintenance. The roof that needs replacing next year, the electrical hookups that are aging out, the roads that need grading. These aren’t on the income statement but they’re coming out of your pocket. A thorough property inspection and a CapEx analysis will surface these. Budget 5% of gross revenue annually for CapEx and make sure your NOI can absorb it.

    Property management software and booking systems. Small line items but real costs that often get buried or omitted in seller financials.

    Insurance. Was the property underinsured? I’ve talked to some owners recently who are not insured! Get your own insurance quote before you close and make sure the actual cost is in your underwriting not the seller’s potentially outdated number.

    Utilities. Did the seller get a sweetheart rate that won’t transfer to you? Verify utility costs independently especially if the property has well water, septic, or propane infrastructure.

    Seasonal labor. Some sellers understate seasonal staffing costs. Ask for payroll records not just the summary expense line.

    Non-arm’s-length expenses. Did the seller’s brother-in-law do the landscaping for below market rates? Did they use their own equipment instead of hiring out? Real world costs may be higher than what the books show.

    The adjustments that give you REAL NOI

    Once you’ve verified the revenue and normalized the expenses you’re ready to calculate what I call Adjusted NOI; the number that actually tells you what the property will perform to under YOUR ownership.

    Here’s the adjustment process:

    Start with the seller’s stated NOI. Then:

    +Add back any non-arm’s length expenses that were below market

    -Subtract any one time or non-recurring revenue that won’t repeat

    -Subtract a market rate management fee if not already included

    -Subtract a CapEx reserve (5% of gross revenue)

    -Subtract any expenses that were omitted or understated

    -Subtract OTA commissions if not already netted out

    What you’re left with is your Adjusted NOI; the real number. And I promise you it is almost always lower than what was on the listing.

    That doesn’t mean it’s a bad deal. It means you’re buying it with your eyes open.

    Why this matters so much

    NOI drives valuation. Most commercial properties are valued using a cap rate; you divide NOI by the cap rate to get value. If a broker is using an inflated NOI to set the asking price the property is overvalued relative to what it will actually produce for you.

    A $50,000 difference in NOI at a 7% cap rate is a $714,000 difference in value. That’s not a rounding error. That’s the difference between a great deal and a very expensive mistake.

    Know your NOI. Know how it was calculated. And always, always, build your own adjusted number from verified data before you make an offer.

    You can do this

    I know this might feel like a lot, but I promise you it’s learnable. Every sophisticated real estate investor goes through this process on every deal. It becomes second nature.

    And if you want a partner to help you work through the numbers on a specific acquisition, that’s exactly what I do. Acquisition underwriting is one of my favorite things because there’s nothing more satisfying than helping an investor see a deal clearly and make a confident decision.

    Whether you decide to buy or walk away, you deserve to do it with full clarity!

    Visit me at https://www.pvifinancial.com and let’s talk about your next deal.

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

    Click here to read “5 Financial Mistakes New RV Park Owners Make in Year One”

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

  • How to Evaluate an RV Park Manager Before You Close

    How to Evaluate an RV Park Manager Before You Close

    Because the person running your park day to day can make or break your investment

    When investors analyze an RV park acquisition they spend a lot of time on the financials. They verify the T12, they stress test the NOI, they model the debt service coverage, and they walk the physical property looking for deferred maintenance and capital needs.

    All of that is absolutely right and necessary.

    But there’s one due diligence item that often gets less attention than it deserves and in my experience it’s one of the most important factors in whether a stabilized RV park stays stabilized after you close.

    The manager.

    The person or people running your park day to day are not just employees. They are the face of your business to every guest who checks in. They are the reason your long term guests come back year after year. They are the operational backbone that keeps things running while you’re not on site. And in a remotely operated park they are essentially the business.

    Getting this evaluation right before you close can save you enormous headaches, expense, and lost revenue after you close. Here’s how I think about it.

    Why the manager evaluation matters so much

    Let me paint two pictures for you.

    In the first picture you close on a stabilized park, the manager stays on, guests love them, operations continue smoothly, and your financial results in year one track closely to the T12 you underwrote. Your transition is seamless.

    In the second picture you close on the same park, the manager leaves or turns out to be underperforming, guests notice the change in service quality, your online reviews take a hit, your repeat guest rate drops, and six months into ownership you’re scrambling to hire and train a replacement while trying to figure out why your revenue is running 15% below pro forma.

    The difference between those two scenarios is often the manager. And you have a much better chance of landing in the first picture if you do a thorough manager evaluation before you close rather than just hoping for the best.

    Step 1, understand the current manager’s relationship with the owner

    The first thing to understand is how the current manager relates to the outgoing owner. Are they a professional property manager with a formal contract? A longtime employee who has been there for years? A family member of the seller? Someone who was recently hired and has no deep roots in the property?

    Each of those situations has very different implications for your transition.

    A professional manager with a formal contract gives you clarity on terms, compensation, and expectations. A longtime employee with deep guest relationships is a huge asset worth protecting but may also have loyalty to the previous owner that takes time to transfer. A family member of the seller may not be interested in staying under new ownership at all. A recently hired manager may have less institutional knowledge than you’d hope.

    Understanding this dynamic tells you a lot about the stability of your management situation going into close.

    Step 2, review their track record objectively

    Look at the operational results on their watch. Occupancy trends, online review scores and volume, repeat guest rates if you can get them, maintenance response times, and any guest complaints or incidents that are documented.

    A manager who has been running a park at 85% occupancy with 4.7 stars on Google for three years is a very different asset than one who recently took over a declining property that happens to look stabilized on a trailing 12 month basis.

    Ask the seller directly how long the current manager has been in the role and what the occupancy and review trends looked like before and after they took over. The answer tells you a lot about whether the financial performance you’re underwriting is because of the manager or in spite of them.

    Step 3, have a direct conversation with them

    This is the step many buyers skip and it’s a mistake. Before you close ask the seller for permission to have a direct conversation with the manager. Most sellers will agree especially if they want a smooth transition.

    In that conversation you’re not just gathering information. You’re also building a relationship. Here’s what to cover:

    How long have they been in the role and what did they do before. What they love about the property and what they find challenging. How they handle guest complaints and difficult situations. What systems and processes they have in place for operations. What they think the property needs most. Whether they’re interested in continuing under new ownership and what their expectations are around compensation and their role going forward.

    Pay attention not just to what they say but how they say it. Do they talk about guests with genuine care? Do they have a clear and organized approach to operations? Do they seem proud of the property? Do they ask thoughtful questions about your plans as the new owner?

    A manager who is engaged, knowledgeable, and genuinely invested in the property is an asset worth paying for. A manager who seems checked out, vague about operations, or primarily concerned about their own situation is a risk worth understanding before you close.

    Step 4, verify their compensation and understand the full cost

    Make sure you understand exactly what the current manager is being paid, including salary or hourly rate, any housing provided on site, utilities covered, bonuses, and any other benefits or perks.

    This matters for two reasons. First, you need to make sure the full cost of management is accurately reflected in your underwriting. Second you need to know what it will take to retain them if you want to.

    A manager who is being paid below market is a flight risk. If they leave shortly after your acquisition because a competitor offers them more money, you’re left scrambling at exactly the wrong time. If retaining them requires a compensation adjustment factor that into your numbers before you close not after.

    Step 5, have a retention plan ready

    If your evaluation tells you this is a strong manager worth keeping have a retention conversation before or immediately after closing. Not a vague “we hope you’ll stay” conversation but a specific discussion about their role, their compensation, their responsibilities, and your expectations going forward.

    Strong managers have options. They know good parks want them. If you want to keep yours, give them a reason to stay early and make it concrete.

    A simple retention bonus tied to staying through the first 12 months of your ownership, a modest compensation increase that reflects their value, and a clear conversation about your plans for the property and their role in those plans goes a long way toward securing the continuity that protects your investment.

    What to do if the manager is a risk

    Sometimes your evaluation tells you the current manager is not someone you want to retain. Maybe their track record doesn’t support the financial results. Maybe they’re clearly not interested in staying. Maybe the seller confirms they’re planning to leave regardless.

    In that case your job before closing is to have a replacement plan ready. Not a theoretical plan but an actual plan. Who will manage the property on day one if the current manager walks? Do you have a candidate identified? Do you have a relationship with a professional property management company that specializes in RV parks?

    Walking into close without a management succession plan when you know the current manager is a risk is one of the most preventable mistakes in RV park acquisition. Don’t let it happen to you.

    The bottom line

    The financial analysis you do before closing tells you what the property has been. The manager evaluation tells you a big part of what it will be under your ownership.

    A great manager is one of the most valuable assets you can inherit in an acquisition. A problematic management situation is one of the most expensive problems to fix after the fact.

    Do the work before you close. Have the conversation. Understand what you have. And walk in on closing day with a clear plan for the person who is going to run your investment every single day.

    If you want help reviewing the deal or thinking through your management transition plan, I would love to work with you.

    Visit me at https://www.pvifinancial.com and let’s make sure you’re set up for success from day one.

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

    Click here to read “How to Structure Your First 90 Days as a New RV Park Owner”

  • Should You Raise Rates After Acquiring an RV Park? How to Know When the Numbers Support It

    Should You Raise Rates After Acquiring an RV Park? How to Know When the Numbers Support It

    Because raising rates too fast can hurt you just as badly as leaving money on the table

    One of the first questions new RV park owners ask after closing is some version of this: the previous owner was charging below market rates, can I just raise them right away?

    It’s a fair question and the instinct behind it is right. If you underwrote the deal partly based on a rate increase thesis you want to start capturing that upside as quickly as possible. Every month you’re charging below market is money you’re leaving on the table.

    But here’s the thing. Rate increases after an acquisition are one of the highest leverage moves you can make AND one of the easiest ways to damage a business you just paid a lot of money for. The difference between a rate increase that works and one that backfires almost always comes down to timing, magnitude, and how well you understand what you actually have.

    Here’s how I think through it.

    First, understand why the previous owner charged what they charged

    Before you change anything you need to understand the pricing strategy you inherited. Was the previous owner charging below market because they didn’t know better? Because they wanted to keep long term guests happy? Because the property has specific limitations that justify lower rates? Because they were afraid of losing occupancy?

    Each of those situations calls for a different approach.

    An owner who simply never raised rates because they were too comfortable is a very different situation from an owner who kept rates low intentionally to maintain 95% occupancy in a market where competitors sit at 70%. In the first case you have real upside. In the second case raising rates aggressively might just trade occupancy for revenue with no net benefit.

    Know why rates are where they are before you decide where they should go.

    The math behind a rate increase

    Let me show you why rate increases are so powerful when they work.

    A 100 site park averaging 75% occupancy at $65 per night generates $1,780,125 in annual revenue. That same park at $70 per night, just a $5 increase, generates $1,916,250. That’s $136,125 in additional annual revenue assuming occupancy holds.

    At a 7% cap rate that incremental revenue adds nearly $2 million in property value. A $5 rate increase becomes a $2 million value creation event if you execute it correctly.

    That’s why rate optimization is one of the first things sophisticated operators look at after acquisition. The upside is enormous.

    But notice the assumption in that math. Occupancy holds. That’s the variable you have to manage.

    The occupancy trade off

    Every rate increase carries some risk of occupancy reduction. The question is how much and whether the math still works.

    Here’s a simple way to think about it. If you raise rates by 10% and occupancy drops by 5% are you better or worse off?

    At $65 per night and 75% occupancy on 100 sites your monthly revenue is approximately $148,750.

    At $71.50 per night and 70% occupancy your monthly revenue is approximately $150,150.

    You’re slightly ahead even with the occupancy drop. The rate increase worked.

    Now run the same math with a 15% occupancy drop and the picture changes. This is why you model before you move.

    When to raise rates and when to wait

    Here’s my general framework for rate increases after acquisition:

    Raise rates immediately if:

    Your rates are more than 20% below comparable properties in your market. You inherited a property with consistently full sites and a waiting list. Your due diligence showed rates haven’t been adjusted in several years. You’re heading into peak season and demand is strong.

    Wait and learn if:

    You just closed and you’re still in your first 30-60 days of ownership. You inherited a property with occupancy below 80% that needs to be stabilized first. You’re heading into shoulder season where demand is softer. You don’t yet have enough data to understand your guests’ price sensitivity.

    Never raise rates if:

    Your DSCR is already tight and any occupancy reduction would put your debt service at risk. You have a significant number of long term tenants whose contracts specify a rate and require notice. You haven’t yet reviewed your competitive set and don’t know where market rates actually are.

    How to raise rates without losing guests

    The how matters as much as the when. Here are the approaches that work best:

    Raise rates on new bookings first. Don’t change rates for guests who are already booked. Honor existing reservations at the old rate and apply new rates to future bookings. This is the least disruptive approach and gives you real data on how new bookings respond before you affect existing relationships.

    Start with your highest demand site types. Full hookup pull-throughs are typically your most in-demand sites. Start your rate increase there where demand is strongest and price sensitivity is lowest. Leave your lower demand site types alone until you have more data.

    Use dynamic pricing if your booking system supports it. Rather than a single flat rate increase consider implementing seasonal pricing, weekend versus weekday pricing, and advance booking discounts. Dynamic pricing lets you capture maximum revenue during peak demand without scaring away guests during slower periods.

    Communicate proactively with long term guests. If you have monthly or seasonal guests who are accustomed to a certain rate a rate increase requires advance notice, often 30-60 days depending on your lease terms. A personal conversation or a well-written letter explaining that you’re investing in improvements goes a long way toward preserving those relationships.

    The competitive set analysis you need to do first

    Before you change a single rate spend an afternoon doing a competitive set analysis. Identify the five to ten RV parks most comparable to yours within a reasonable drive, similar amenities, similar site types, similar market. Check their current rates on their website or on the booking platforms they use.

    Build a simple spreadsheet that shows your current rates versus market rates for each site type. Where are you at market? Where are you below? Where are you actually above market and potentially vulnerable to losing guests to competitors?

    That analysis tells you exactly where your rate increase opportunity is and where you need to be careful. It takes a few hours and it’s worth every minute.

    The bottom line

    Raising rates after an RV park acquisition is one of the most powerful value creation levers available to you. Done correctly it can add significant revenue and meaningful property value in a relatively short period of time.

    Done incorrectly it can damage guest relationships, hurt occupancy, and create the kind of revenue volatility that makes lenders nervous and makes your life stressful.

    The difference is doing the analysis first. Know your market. Know your occupancy. Know your guests. Model the math before you move. And when you do raise rates do it thoughtfully, communicating clearly and honoring existing commitments.

    The numbers will tell you when the time is right. Trust the numbers.

    If you want help analyzing your rate increase opportunity and modeling the revenue impact before you make any changes I would love to work through it with you.

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

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

    Click here to read “How To Structure Your First 90 Days as an RV Park Owner”