Tag: accounting

Cap rate vs EBITDA multiple is a comparison that trips up a lot of RV park buyers, especially as more listings and brokers start quoting EBITDA multiples alongside the traditional cap rate. Neither number is wrong, and neither one is more sophisticated than the other. They are two ways of expressing the exact same relationship, and once you understand how cap rate vs EBITDA multiple actually connects, a lot of the confusion disappears.

Truth 1: A Cap Rate and an EBITDA Multiple Are Mathematical Inverses

This is the entire foundation of the cap rate vs EBITDA multiple relationship. A cap rate is your income divided by price. A multiple is your price divided by income. They are inverses of each other, and the math confirms it directly: the cap rate is the reciprocal of the EBITDA multiple commonly used to value companies. Once that clicks, cap rate vs EBITDA multiple stops feeling like two competing systems and starts feeling like two dialects of the same language. Breaking Into Wall Street

Truth 2: You Can Convert One to the Other Instantly

Here is the shortcut that makes cap rate vs EBITDA multiple easy to navigate in real time. Divide 1 by the cap rate to get the multiple, or divide 1 by the multiple to get the cap rate. An 8 percent cap rate equals a 12.5x multiple. A 10x multiple equals a 10 percent cap rate. Once you know this conversion, you can compare any listing regardless of which number the broker chose to lead with.

Truth 3: The Number a Broker Chooses to Lead With Is a Marketing Decision

Brokers know that a lower cap rate and a higher multiple both sound more attractive, even though they can represent the exact same deal. A park priced at a 7 percent cap rate could just as easily be marketed as a 14x multiple, and the underlying value has not changed at all in the cap rate vs EBITDA multiple comparison. Do not let the framing of the number influence how you feel about the price before you have run your own cap rate analysis.

Truth 4: NOI and EBITDA Are Not Always Calculated the Same Way

This is where cap rate vs EBITDA multiple gets genuinely tricky, not because the math is hard, but because the inputs vary. Finding the real NOI number in an RV park deal often means rebuilding the seller’s figure from scratch, and EBITDA calculations carry their own inconsistencies around what gets added back. Two brokers can hand you two different numbers for the exact same park depending on what they chose to include, regardless of whether they call it NOI or EBITDA.

Truth 5: Cap Rate vs EBITDA Multiple Does Not Replace Your Own Underwriting

Both numbers are shorthand, and shorthand is exactly what gets buyers into trouble when they skip the underlying work. A cap rate or a multiple tells you how the market is framing a deal, not whether the deal actually works for you. Your own return on investment analysis still has to happen regardless of which number is printed on the listing.

Putting Cap Rate vs EBITDA Multiple Into Practice

Next time you see a listing quoted as an 11x multiple, do the quick math, divide 1 by 11, and you get roughly a 9 percent cap rate. That single conversion lets you compare it directly against every other cap rate deal you are evaluating, no matter how the broker chose to present it. Understanding cap rate vs EBITDA multiple is not about picking a favorite metric, it is about being able to speak both languages fluently so no listing catches you off guard.

If you want to go deeper on how RV park financials actually work, everything I have written on acquisitions, bookkeeping, and cash flow lives in the RV Park Resource Library. And if you want the full framework for evaluating a deal from first look through your first ninety days of ownership, that is exactly what I built into From Offer to Operation, available on Gumroad or by searching Amazon for the title.

Full explanation of the cap rate and EBITDA multiple relationship is available via Breaking Into Wall Street.

Every RV park due diligence checklist online tells you the same thing. Check the septic system. Review the leases. Look at the insurance. Pull the utility bills. Get an environmental report.

What none of them tell you is what happens in your bank account when you skip one of those steps. A checklist item without a dollar amount attached to it is just a suggestion. You can talk yourself out of a suggestion when you are three weeks into a deal and excited about closing. It is a lot harder to talk yourself out of a $58,000 line item. That is the real RV park due diligence cost, not just a list of things to inspect.

So instead of another generic list, here is the RV park due diligence cost breakdown. Same checklist items you have seen everywhere else, but with the actual dollar consequence attached to each one, using an example park I will call Blue Heron RV Park, 54 sites, to walk through the math.

Why Generic Checklists Don’t Actually Protect You

I have looked at the checklists on the bigger RV park sites and the pattern is always the same. “Inspect the septic system.” “Review the leases.” “Check the insurance coverage.” True statements, all of them. But a buyer reading that list has no idea whether skipping any one item costs them $2,000 or $200,000. Without that number, every item on the list feels optional, and that is exactly why RV park due diligence cost needs to be spelled out, not implied. My checklist here has the numbers next to every item, because the number is the whole point.

If you want the fuller 10-item version of this checklist first, I already wrote the RV Park Due Diligence Checklist. This post picks up where it leaves off and answers the question that one didn’t: what does each miss actually cost you.

Item 1: Septic and Wastewater System Age

Generic checklist: “Inspect the septic system.”

RV park due diligence cost: A 54-site park on a shared septic system that is past its 20-year design life is not a maintenance item, it is a replacement project. At Blue Heron, a licensed inspector found the drain field failing on two of three leach fields. Replacement cost for a system this size runs $50,000 to $65,000. I used $58,000 as the number that lands in year one if the buyer does not catch this before closing.

Item 2: Electrical Panels and Site Pedestals

Generic checklist: “Check the electrical infrastructure.”

RV park due diligence cost: Blue Heron’s pedestals were original to a 1998 build, rated at 30 amp when most RVs on the road now need 50 amp service to run air conditioning and appliances at the same time. Upgrading 54 pedestals plus the panel that feeds them runs $22,000. Skip this and you are turning away the exact guests who pay the highest nightly rates.

Item 3: Road Base and Paving Condition

Generic checklist: “Walk the property and note deferred maintenance.”

RV park due diligence cost: Cracked, unmaintained roads are easy to miss on a broker tour scheduled on a sunny afternoon. At Blue Heron, the internal roads had not been resurfaced in over a decade, and with 54 sites the road network covers real ground, not a driveway. A geotechnical estimate for base repair and resurfacing across the full internal road system came in at $84,000. That is a number the seller’s P&L will never show you, because deferred maintenance does not show up as an expense until you are the one paying for it.

Item 4: Long-Term Tenant Lease Terms

Generic checklist: “Review all leases.”

RV park due diligence cost: Eleven long-term tenants at Blue Heron were locked into month-to-month agreements with no rate escalation clause, some unchanged in four years while market rates in the area climbed 18 percent. That gap works out to $11,400 a year in revenue the park is leaving on the table before you even factor in the cost of renegotiating those terms after closing. If you want to understand why the seller’s numbers and your numbers are never the same thing, that is the whole idea behind why the seller’s pro forma is not your pro forma.

Item 5: Insurance Coverage and Flood Zone Status

Generic checklist: “Confirm adequate insurance coverage.”

RV park due diligence cost: An independent insurance quote at Blue Heron came in $8,200 a year higher than the seller’s current policy, once flood zone designation and full replacement cost coverage were factored in properly. Sellers frequently carry legacy policies that have not been updated to reflect current replacement costs or flood maps. That gap does not show up until you are the one signing the renewal.

Item 6: Environmental and Wetland Designation

Generic checklist: “Order an environmental report.”

RV park due diligence cost: A Phase 1 environmental assessment for Blue Heron ran $15,000, and it is not an optional line item you can skip to save money. Wetland encroachment or a prior gas station on an adjacent parcel can turn into a mitigation cost or an insurance and financing problem that follows the property for years. The SBA’s own guidance on buying an existing business points to this same principle: due diligence has to cover the physical condition and the paperwork, not just the profit and loss statement, before you commit capital.

Item 7: Owner Labor Not Reflected in the P&L

Generic checklist: “Verify the management structure.”

RV park due diligence cost: This is the one that shows up in almost every deal I underwrite. The seller at Blue Heron worked the front desk, coordinated all maintenance, and handled bookkeeping personally for eleven years, and none of that labor appears as an expense anywhere in the financials. Replacing that labor with hired staff at market rate costs $72,000 a year. I wrote an entire post on this exact pattern, The $312,000 Mistake, because it is the single biggest gap between what a park looks like it earns and what it actually earns once you have to pay someone to run it.

Item 8: Deferred Amenity Maintenance

Generic checklist: “Inspect common area amenities.”

RV park due diligence cost: The pool liner, bathhouse fixtures, and laundry equipment at Blue Heron were all original to the property and past their useful life. Bringing those amenities current runs $27,500. Amenities are the first thing to get deferred by an owner trying to protect their bottom line in the final years before a sale, which is exactly why they need a hard look, not a walkthrough glance.

What the Real RV Park Due Diligence Cost Looks Like

Here is the RV park due diligence cost, item by item, added up:

Item	Cost
Septic system replacement	$58,000
Electrical panel and pedestal upgrade	$22,000
Road base and resurfacing	$84,000
Long-term lease revenue gap (annual)	$11,400
Insurance coverage gap (annual)	$8,200
Environmental assessment	$15,000
Owner labor not in P&L (annual)	$72,000
Deferred amenity maintenance	$27,500
Total year-one impact	$298,100

That is the difference between a checklist that tells you to look at something and a checklist that tells you what happens if you don’t. None of these numbers show up on the seller’s P&L. All of them show up in your bank account in year one if you do not catch them first.

If you want to see how these same gaps affect the actual valuation and cap rate on a deal once you rebuild the NOI properly, that is exactly what I walked through in The $312,000 Mistake. And if you want the full system for how I evaluate a park before I ever get to this level of detail, start with how to evaluate an RV park deal.

Do This Before You Make an Offer

Every item on this list has a dollar figure attached to it, because RV park due diligence cost only protects you when it is specific enough to negotiate with. A buyer who walks into a seller call with “your septic system needs replacing” has a weaker negotiating position than a buyer who walks in with “your septic system needs a $58,000 replacement, and here is the inspector’s report.”

If you are underwriting a park right now, run your own numbers through the free NOI calculator at PVIFinancial.com before you make an offer. And if you want a second set of eyes on a specific deal, acquisition underwriting starts at just $99 for a deal screen, and a full underwrite is priced depending on complexity.

If you have not picked up a copy yet, 𝗙𝗿𝗼𝗺 𝗢𝗳𝗳𝗲𝗿 𝘁𝗼 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻: 𝗧𝗵𝗲 𝗖𝗼𝗺𝗽𝗹𝗲𝘁𝗲 𝗥𝗩 𝗣𝗮𝗿𝗸 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿’𝘀 𝗚𝘂𝗶𝗱𝗲 covers the full due diligence and underwriting framework this RV park due diligence cost breakdown is built on. Grab it on Gumroad or search the title on Amazon.

And check the RV Park Resource Library for the rest of the due diligence series if you want to go deeper before you close.

~Wendi | Fractional CFO | PVIFinancial.com

Right now I have 5 RV park deals on my desk, and every single one is teaching me something about RV park investing.

A three park portfolio in Florida, one motorcoach resort and two long term parks. A waterfront destination park in Oklahoma. And a river property in North Carolina with an equestrian vibe, acres of trails, and a guest experience that is genuinely hard to put a cap rate on.

All three are in active underwriting at different stages. All three have shown me something different this month. And all three have reminded me why RV park investing is one of the best opportunities in commercial real estate right now, and also one of the most misunderstood asset classes I have worked in.

Here is what I want to say before we go any further. RV park investing is not passive income. I know that is not what you read on most investing blogs, and I know the pitch sounds great: land, cash flow, outdoor recreation tailwinds, and a fragmented market full of mom and pop operators who have not raised rates in ten years. All of that is true. But so is this: RV parks are businesses, not mailbox money, and the investors who treat them like mailbox money are the ones who call me six months after closing wondering why the numbers do not look like the offering memorandum.

I just talked to a seller who took over a park using creative financing with no payments due for twelve months. The plan was to come in, make updates, add amenities, and get the park running the way they envisioned it. Six months in, they have barely made a dent in the construction list, and they have not done a single thing on the marketing side. Their reasoning? They do not want guests to be disappointed by the noise and the unfinished state of the property.

I understand the instinct, but here is the reality: they now have six months left before payments kick in, no revenue coming in to cover what is coming, and no pipeline of guests being built. That is not a renovation strategy. That is a countdown clock. RV park investing rewards owners who treat it like the business it is from day one, not from the day they feel ready.

I built my last company working fourteen hour days. I am not scared of hard work and I love the entrepreneur life. But I want you to go into RV park investing with eyes wide open, because the upside is very real, and so is the work required to capture it.

Now let me tell you what my desk looks like this week.

RV park investing is not one asset class, it is actually several

One of the biggest mistakes I see buyers make in RV park investing is assuming all parks underwrite the same way. They do not, and the three deals I am working right now make that point better than anything I could say in theory.

The Florida portfolio is the clearest example. One motorcoach resort and two long term parks, all under the same ownership, all in the same general market, and all three are completely different animals financially. The motorcoach resort runs premium nightly rates, attracts a higher income traveler, and lives and dies by its amenity stack and online reputation. The two long term parks run on monthly site rent, have lower per site revenue, and operate more like a mobile home park than a traditional campground. Same seller. Same state. Completely different underwriting. This is one of the most important things to understand about RV park investing before you ever make an offer.

The Oklahoma waterfront park is a destination play. Location is doing a lot of the heavy lifting there, and the questions I am asking are about durability, what holds this park together when the peak season ends and what the off season expense structure actually looks like. Every destination park in RV park investing has a version of this question hiding underneath the surface numbers.

The North Carolina river property is something else entirely. Equestrian trail access, acreage, a lifestyle amenity that you genuinely cannot replicate. The question there is not whether guests love it, they do, it is whether the financial infrastructure exists to support what it is trying to be. That is a different kind of red flag in RV park investing, not fraud, not deception, just a gap between the experience the park delivers and the systems behind it.

Each of these deals requires a completely different underwriting lens. If you want to go deeper on how to think through deal types before you make an offer, my RV Park Resource Library has a growing list of posts on acquisition analysis, due diligence, and financial modeling, and it grows daily.

Gross income is not the whole story in RV park investing

One of the Florida sellers sent me her financials early in the process. Software reports, a T-12, and P&Ls. Clean presentation. Organized. On the surface it looked like exactly what I needed.

I asked for the occupancy reports from her reservation software.

She said she already gave me all the income.

I explained that I did not need the income number. I needed to know how it was earned.

It took a full week to get those reports. A week of back and forth, explaining that gross income alone does not tell me whether revenue came from 80% occupancy at market rates, or 40% occupancy at premium rates, or a handful of long term tenants subsidizing a park that transient guests are not actually choosing. Those are three completely different businesses with three completely different risk profiles, and they can all produce the same gross income number on a P&L.

This is not a knock on the seller. She was not hiding anything. She genuinely did not understand why the number was not enough. But that gap, between what income looks like on paper and how it was actually earned, is where deals get mispriced in RV park investing, and where buyers who skip this step get hurt.

If you want to see what happens when a buyer accepts income at face value without rebuilding the revenue picture, I wrote about exactly that in The $312,000 Mistake. It happens more than you think.

Revenue mix is the most underrated number in RV park investing

Once you have the occupancy data, the next question in RV park investing is what is driving the revenue and whether that revenue is durable.

A park with 70% long term tenants looks stable on paper. Monthly site rent, predictable cash flow, low turnover. But long term tenants also cap your upside, limit your ability to raise rates quickly, and in some cases represent a cultural dynamic that is genuinely hard to change after closing. Buyers who underwrite long term parks at transient rates are making a serious error in RV park investing, and I see it more often than I should.

A park that is 80% transient looks exciting on paper. Nightly rates, strong average daily rate, flexible pricing. But transient revenue is seasonal, weather dependent, OTA dependent in some cases, and requires active management of reservations, marketing, and guest experience. That is not passive. That is hospitality.

Understanding your revenue mix before you close is not optional in RV park investing. It is the difference between buying what you think you are buying and buying something that only looks like it on the surface. For more on how to pressure test the revenue picture before you make an offer, Buying a Mom and Pop RV Park: 7 Hidden Risks That Destroy First Year Cash Flow is worth reading next.

Seasonality is a cash flow problem, not just a calendar problem

Every buyer in RV park investing knows parks can be seasonal. What fewer buyers model correctly is what seasonality actually does to cash flow over a twelve month period, and that gap is where first year owners get into real trouble.

Here is a simplified version of what I look at. Say a park generates $1,200,000 in annual revenue. Sounds solid. But if 70% of that revenue ($840,000) comes in five months and the other 30% ($360,000) comes in seven months, the cash flow picture looks completely different from the annual number. Fixed costs like debt service, insurance, property taxes, and minimum staffing do not take the winter off. They run all twelve months.

A park with $1,200,000 in annual revenue and $780,000 in annual fixed costs including debt service looks fine on an annual DSCR. But if $65,000 of those fixed costs hit in January and revenue that month is only $28,000, you have a liquidity problem, not a profitability problem. Those are different issues with different solutions, and most buyers I work with in RV park investing never model the monthly cash flow picture before closing.

The North Carolina equestrian property I am looking at right now has this exact dynamic. Beautiful park, loyal guests, strong reviews. The monthly cash flow model is where the real conversation starts. For more on how to run this kind of stress test, How to Calculate Break-Even for Your RV Park walks through the math step by step.

RV park investing is a great opportunity if you treat it like a business

I said it at the top and I will say it again. RV park investing is one of the best opportunities in the market right now. The fundamentals are genuinely strong: fragmented ownership, under-managed assets, a growing base of RV owners and outdoor recreation enthusiasts, and a financing environment where a lender who does these loans every day can structure an acquisition that works for your specific deal. The RVIA publishes current data on RV shipments and industry growth that is worth bookmarking if you want the macro picture.

But the investors who win in RV park investing are the ones who go in understanding that they are buying a business, not a check. The parks that perform are the ones with owners who are engaged, financially literate, and willing to do the work of running a hospitality operation with real estate underneath it.

I built a company working fourteen hour days. I am not telling you that to brag. I am telling you because I want you to know that when I say RV park investing requires real work, I am not trying to scare you off. I am trying to set you up for success. The upside is absolutely there. So is the work. And if you go in knowing both of those things, you are already ahead of most buyers I see in this market.

If you want help understanding what a deal actually looks like financially before you make an offer, deal screening starts at just $99 and a full acquisition underwrite is priced depending on complexity. Reach out at PVIFinancial.com.

Related reading:

• RV Park Due Diligence Red Flags: 5 Financial Lies RV Park Sellers Don’t Want You to Find
• SBA Loan for RV Park: 7 Critical Things Every Buyer Must Know Before Applying
• RV Park Return on Investment: 5 Dangerous Mistakes That Destroy Your Returns Before You Close
• What a Lender Actually Looks at Before Approving an RV Park Loan

For the full acquisition framework in one place, my book From Offer to Operation: The Complete RV Park Investor’s Guide is available for immediate download Here at Gumroad or by searching the title on Amazon.

Check out the RV Park Resource Library for the full list of posts, updated daily.

~Wendi | Fractional CFO | PVIFinancial.com

Buying an RV park looks simple from the outside. Find a park, check the cap rate, get a loan, collect the site rent.

The reality has more moving parts, and the buyers who get hurt are the ones who skip steps. I underwrite these deals for a living, and this roadmap walks through the major stages of buying an RV park, from the market itself to your first 90 days as an owner.

Why RV Parks Are Attracting Investors in 2026

The demand side keeps growing. The RV Industry Association reports over 11 million American households now own an RV.

Remote work turned full-time RV living into a real option for working professionals. Boomers are retiring into the lifestyle, and Millennials are the fastest-growing buyer group.

The supply side barely moves. Most counties make new park zoning very difficult, and some existing parks get converted to housing developments and disappear.

Growing demand plus near-fixed supply is the backdrop for anyone buying an RV park right now.

One caution: an RV park is not passive income. It is part commercial real estate, part hospitality business. The land appreciates like real estate, but the revenue behaves like a hotel, with seasonality, reviews, and guests who expect service. That is why parks can outperform passive real estate, and why they demand more of you.

Site Mix: What Actually Drives the Money

Two 100-site parks can have completely different earning power. Site mix is the biggest reason, and it is the first thing I study when buying an RV park.

Full hookup sites (water, sewer, electric) are the premium product. Typical nightly rates run $50 to $80 in most markets, higher at destination resorts.

Partial hookup sites rent meaningfully lower. Tent and primitive sites lower still.

Converting a partial site to full hookup typically costs $5,000 to $15,000 per site, and it is one of the cleanest value-add plays in the asset class.

Electrical service matters just as much. Modern rigs need 50-amp power. A park stuck on 30-amp pedestals is invisible to the highest-paying guests, and upgrades run a few thousand dollars per site. Count the 50-amp sites yourself when buying an RV park, and never take the listing’s word for it.

Guest mix is the other half of the equation. Monthly long-term guests provide stable income at lower rates, usually a few hundred to $1,500 per month. Nightly transient guests pay far more but disappear in the off-season, and balancing the two is a core decision in buying an RV park.

Neither is better in the abstract. What matters is knowing which business you are actually buying.

Clearly break down your revenue mix. Site rent is usually 70 to 85 percent of total revenue. The rest comes from cabins, the camp store, laundry, and fees. Cabins deserve special attention, because they rent for double or triple a site and open the park to people who do not own an RV at all.

Occupancy Is a Curve, Not a Number

The occupancy pattern depends entirely on where the park sits, and reading it correctly is step one in buying an RV park.

Snowbird markets (Florida, desert Southwest): full all winter, quiet all summer.

Northern parks: most revenue lands between Memorial Day and Labor Day, some close completely for winter.

Year-round markets: steadier occupancy, often in the 70s and 80s.

Highway travel-route parks: lower overall, swinging with the seasons.

None of these patterns is a problem by itself. But you need to see the pattern clearly before you commit.

Plot the trailing 24 to 36 months of revenue by month before you even think of writing an offer. If the seller cannot produce monthly numbers, that tells you something too. Buying an RV park without seeing the revenue curve is buying blind.

The Seller’s Books Will Be Messy. Plan on It.

Here is what nobody tells you about buying an RV park: the financials you receive will almost never be usable as-is.

Most parks run cash basis books in QuickBooks, or a shoebox. The P&L often includes the owner’s truck, health insurance, sometimes groceries.

Revenue gets recorded when deposits hit the bank, not when the stays happened. That distorts seasonality and makes year-over-year comparisons meaningless, which is a real problem when buying an RV park.

Before you can value anything, rebuild the revenue on an accrual basis and strip the personal spending out of the expenses. In my underwriting work, that reconstruction regularly moves NOI by 10 to 20 percent, in either direction.

Every number that follows, the price, the loan, the returns, sits on top of that rebuilt NOI. Get it right first.

Valuation: Cap Rates and What Parks Actually Trade For

RV parks are valued on cap rates: NOI divided by purchase price. Rough 2026 ranges by park quality:

Destination resorts with premium amenities: 5 to 7 percent

Quality established parks: 7 to 9 percent

Standard parks: 8 to 10 percent

Value-add and heavily seasonal parks: 10 to 13 percent or higher

Lower cap rate means higher price for the same income. The higher cap rates on rougher parks are compensation for risk and work, not free yield.

Expense ratios are the other half of NOI. Well-run parks operate at 30 to 45 percent of revenue. When a broker package shows 25 percent on a full-amenity park, expenses are missing, usually a management fee, real maintenance, and reserves.

A quick worked example. A 90-site park: 70 full hookups averaging $55 a night at 58 percent occupancy is about $820,000. Twenty partial sites add roughly $72,000. Cabins, store, laundry, and fees add about $61,000. Gross revenue lands near $953,000.

At a realistic 42 percent expense ratio, NOI comes in around $553,000. At a 9 cap the park is worth about $6.1 million. At an 8 cap, $6.9 million. Small assumption changes move big money when buying an RV park.

That $800,000 spread between two defensible cap rates is why you never anchor on the broker’s number when buying an RV park.

The trap: a package showing a 9 cap on pro forma NOI might be a 6 cap on real trailing numbers. Underwrite off verified trailing twelve month actuals, adjusted for a market-rate management fee even if you plan to self-manage. Every lender and every future buyer will apply that fee whether you did or not.

Due Diligence When Buying an RV Park: What to Inspect and Verify

Infrastructure first. These are the systems that carry six-figure price tags when they fail.

Water: well or municipal, capacity at peak weekends, pipe age, testing history, compliance.

Sewer: municipal, septic, or hybrid, capacity at full occupancy, dump station condition. Septic surprises are expensive and slow to fix.

Electric: amps per site, pedestal condition, code compliance.

Roads and pads: drainage, pad length for modern rigs. Road repair commonly runs $1,000 to $3,000 per site when it comes due.

Amenities: pool code compliance, bathhouse condition, Wi-Fi infrastructure. Guests now treat Wi-Fi as a utility, not a perk.

Environmental: a Phase 1 assessment is cheap insurance. Pull the FEMA flood maps, get flood insurance quotes, and ask directly about flooding history. Parks sit near water on purpose, and flood exposure changes your insurance cost, which changes your NOI.

Permits and zoning: confirm the use is legal, the permits transfer, and no moratorium blocks expansion.

Budget honestly for what you find. Most parks carry $50,000 to $500,000 in deferred capital needs at acquisition. A first 24-month capex budget of 5 to 15 percent of purchase price is a reasonable planning range when buying an RV park.

Then the financial diligence, which is what actually kills deals:

Verify the occupancy claim. Pull the reservation system export and reconcile it against bank deposits and tax returns. When the sources disagree, the claim is unverified, and unverified occupancy gets underwritten down, not taken on faith.

Question flat rate history. A park that has not raised rates in five years is not automatically upside. Sometimes the market will not bear more. Sometimes the monthly guests leave the moment you try.

Check the customer base. Repeat guest percentage, geographic origin, and reviews across Google, Campendium, and Good Sam tell you whether the revenue is durable. A park living off one annual event or one aging group of monthlies has concentration risk the P&L never shows.

Financing: What to Expect in 2026

SBA 7(a) does the heavy lifting for owner-operator deals up to $5 million. Down payments start around 15 percent for a first-time buyer, repayment stretches as long as 25 years when real estate is involved, and rates adjust with the market rather than staying fixed. Details are at the SBA 7(a) loan page.

Specialty lenders in outdoor hospitality understand seasonal revenue instead of panicking at it. A generalist lender who has never seen a seasonal curve will slow your deal down at best. If you want a referral to lenders who know this asset class, contact me at PVIFinancial.com.

Conventional commercial lending takes over on larger deals, roughly $5 million and up, at 25 to 35 percent down.

Seller financing deserves real attention when buying an RV park. It can cover up to 50 percent of the purchase price, and a seller note on standby can help complete an SBA capital stack. After eight years as a private money lender with over $4 million deployed in first trust deeds, I can tell you a seller willing to carry paper is signaling confidence in their own park, and the note terms are as negotiable as the price.

Here is what you should internalize about financing: the lender underwrites the deal independently. If your numbers came from the broker’s pro forma, the appraisal will find the gap 60 days into escrow, after your diligence money is spent.

Buyers who show up with clean, accrual-based, verified financials close faster and negotiate better.

Where the Real Upside Lives

Every listing promises upside. Here is where it actually exists, in rough order of reliability:

Below-market rates. If comparable parks genuinely charge more, raising rates to market is real upside. It takes two or three seasons of gradual increases, not one jump, and only after you have verified the comps.

Hookup conversions. Partial to full hookup raises per-site revenue substantially when the water and sewer systems can support it.

Modern operations. Online booking and a real website capture occupancy a phone-and-paper operation loses.

Amenity additions. Cabins, a proper camp store, expanded laundry. Each adds its own revenue and supports higher site rates across the board.

Guest mix optimization. Shifting the monthly-versus-transient balance toward what the market rewards moves revenue without touching a single rate.

The discipline is simple: model each play before you pay for it. Upside you pay the seller for is not upside, it is just price. Buying an RV park at a basis where the value-add belongs to you is the entire game.

Run It Like an Underwriter, Not a Fan

Before I finish underwriting any park, the model has to answer five questions:

What is the verified NOI today? What does real debt service look like? What is the year-one cash-on-cash return? What capital does the park need in the first 24 months? And what has to be true for this deal to beat what the same money earns elsewhere?

That last question matters most. Buying an RV park is not the goal. Buying the right park at the right basis is the goal, and the discipline to walk away is the most valuable skill in the process.

Your First 90 Days as an Owner

Weeks 1 and 2: move the reservation system and bank accounts, update insurance, honor every existing reservation, meet the staff one on one before changing anything.

Weeks 3 and 4: walk the infrastructure yourself, compare the site mix to what you underwrote, read every review from the past two years.

Month 2: build your capex priority list from what you now see up close. Review rates with real data. Hold rate changes until at least day 90.

Month 3: start the strategy work. Marketing improvements, first capital projects, relationships with the county and local businesses.

And from day one, set up real books. Clean accrual accounting from your first day means you never inherit the mess you just untangled from the seller, and your numbers become the rare set a future buyer’s underwriter does not have to rebuild.

If buying an RV park is the offense, the financial systems behind it are the defense. Championships get won on defense.

Common Questions About Buying an RV Park

How much money do I need?

Plan on roughly 15 to 20 percent down for an SBA deal as a first-time buyer, plus closing costs, off-season working capital, and a real capex reserve. On a $2 million park, total liquidity of $450,000 to $600,000 is a realistic target.

What is a good cap rate?

There is no single number. Destination resorts trade at 5 to 7 percent, established parks at 7 to 9, standard parks at 8 to 10, value-add parks at 10 or above. What matters is that the cap rate sits on verified NOI, not the broker’s pro forma.

Can I do this with no experience?

Yes, people do it every year. The ones who succeed try to keep the existing staff through the transition and get professional help on the numbers before they buy, not after something goes wrong. Experience helps, but discipline matters more in buying an RV park.”

How long does buying an RV park take?

My lender says they can close in 45-60 days, but it can be up to 90 to 150 days from signed letter of intent to close on an SBA deal if the financial information is not well organized. The search before that can take months, because most listed parks are priced for a buyer who does not check the math.

Is an RV park passive income?

No. It is an operating hospitality business. You can hire management, but a market-rate management fee belongs in your underwriting either way.

What kills most deals?

Financials that do not survive verification. Occupancy claims the records do not support, pro forma expenses missing a management fee and reserves, and rebuilt NOI coming in far enough below asking that the deal no longer pencils.

Go Deeper

I wrote From Offer to Operation: The Complete RV Park Investor’s Guide to walk through the entire acquisition process in detail, from the first broker call through your first season of ownership. It is also on Amazon if you search the title.

The Resource Library has dozens of posts organized by topic, including deeper dives on valuation, operating expenses, and financing.

And if you are looking at a specific park right now and want the numbers verified before you commit real money, that is exactly the kind of work I do. Reach out at PVIFinancial.com.

If you are trying to figure out how to buy an RV park in a competitive market, you are not alone, and the competition is real. The outdoor hospitality space has exploded in popularity, and the supply of quality parks for sale has not come close to keeping up with demand. Good deals get multiple offers. Sellers know their leverage. And buyers who are not prepared move slow, lose deals, and wonder what happened.

Here is what serious buyers who know how to buy an RV park in a competitive market do differently.

How to Buy an RV Park in a Competitive Market: 7 Moves That Win Deals

1. You have to be underwritten before you make an offer

This is the single biggest mistake I see new investors make. They fall in love with a deal, make an offer, and then start running the numbers. By the time they figure out what the deal is actually worth, the seller has already accepted someone else’s offer or the LOI window has closed.

Understanding how to buy an RV park in a competitive market starts with having your numbers ready before you fall in love with a deal. That means looking at the trailing 12 months of revenue and expenses, stress-testing occupancy, modeling your financing, and building a real NOI picture, not the one the broker handed you. You need to know your max price before you enter a negotiation, not after. If you want to understand what that rebuild actually looks like, start with What is NOI? And How to Find the REAL Number in an Acquisition.

This is the foundation of how to buy an RV park in a competitive market and the step most buyers skip entirely.

2. Fast underwriting is a competitive advantage

Most buyers take a week or two to run their numbers. If you can turn a full underwrite in 24 hours, you show up to every deal faster and more credible than the competition. Speed and accuracy are the two things that define how to buy an RV park in a competitive market successfully.

This is exactly where working with a Fractional CFO who specializes in RV park acquisitions changes the game. I offer deal underwriting as a standalone service for buyers who need speed and accuracy. If you want to visually see how to buy an RV park in a competitive market, send me the financials, I build the model, and you have a decision-quality analysis often within 24 hours. You know your offer price, your cap rate, your cash-on-cash return, and your risk flags before you ever pick up the phone with the broker. Deal screening starts at just $99 and a full acquisition underwrite is priced depending on complexity. You can see the full breakdown at PVIFinancial.com.

That is how you buy an RV park in a competitive market and actually win.

3. Stop relying on the broker’s numbers

Brokers represent sellers. The OM they hand you is built to make the deal look as good as possible. Expense ratios are often understated. Vacancy assumptions are optimistic. Revenue projections include upside that may or may not materialize.

Your job is to recast those numbers based on reality. That means using actual industry expense ratios, realistic occupancy by season, market rate comparisons for the area, and your own financing assumptions. I covered exactly how this plays out in The $312,000 Mistake: What Happens When a Buyer Accepts the Seller’s NOI Without Rebuilding It. If the deal still works after your recast, you have something worth pursuing. If it only works using the broker’s numbers, walk away.

This is one of the most important things to understand about how to buy an RV park in a competitive market.

4. Know what you’re actually buying

An RV park is a business, not just a piece of real estate. The land matters, but so does the revenue mix, the customer base, the online reputation, the utility infrastructure, the age of hookups, the permit status, and a dozen other operational factors that do not show up on a cap rate summary.

Before you get too deep into any deal, make sure you understand where the revenue actually comes from. Is it seasonal or year-round? Is it heavily OTA-dependent? Are there long-term tenants subsidizing the numbers in ways that inflate NOI but limit upside? How old are the electrical pedestals? These are not afterthoughts, they are part of the underwriting. The Due Diligence Items Nobody Talks About is a good place to start, and so is Before You Fall in Love With That RV Park, Do This First. These posts will help you learn how to buy an RV park in a competitive market.

5. Get your financing pre-organized

Competitive sellers favor buyers who can close. If you show up to a deal still figuring out how you are going to finance it, you are already behind. Know your lender before you need them. Understand whether your deal is SBA-eligible or conventional. Have a conversation with a lender who specializes in outdoor hospitality before you are under contract so you know your parameters going in.

A pre-organized buyer moves faster and negotiates stronger. If you want to understand what lenders are actually looking at when they evaluate a deal, read What a Lender Actually Looks at Before Approving an RV Park Loan.

Buyers who know how to buy an RV park in a competitive market show up with their financing already figured out.

6. Build relationships with brokers before you need them

The best deals in outdoor hospitality do not always make it to LoopNet. Brokers who work this niche have buyers lists and they call their trusted buyers first. If you are not on those lists, you are competing over whatever is left.

That means proactively reaching out to brokers who specialize in RV parks and campgrounds, telling them exactly what you are looking for, and following up consistently. Be someone they want to call.

Building broker relationships before you need them is one of the most underrated strategies for how to buy an RV park in a competitive market.

7. Make clean offers

One of the most overlooked aspects of how to buy an RV park in a competitive market is how you present yourself as a buyer. Know your price, know your contingency timeline, and do not load up the LOI with unnecessary complexity. Sellers who have multiple offers on the table are going to choose the buyer who looks the most capable of closing, not necessarily the one with the highest price.

A clean, well-structured offer from a credible, prepared buyer beats a messy high offer more often than people think.

One more thing most buyers never think about until it is too late: how you present yourself financially matters as much as the offer itself. A seller with multiple LOIs on the table is going to feel more confident in the buyer whose personal financial statement is clean, current, and organized, not the one who scrambles to email over a blurry PDF at the last minute.

I offer personal financial statement review and packaging as part of my acquisition support services. I will look at what you have, identify anything that could give a seller or lender pause, and help you put together a buyer package that signals you are serious, qualified, and ready to close. It is one of those things that costs very little and can absolutely be the difference in a competitive situation.

To buy an RV park in a competitive market you have to be fully prepared. If you want help getting your financials buyer-ready, reach out at PVIFinancial.com.

The bottom line

Knowing how to buy an RV park in a competitive market is not impossible, but it is not easy either. The investors who are winning deals are the ones who are prepared before the opportunity shows up, not scrambling to get ready after it does.

If you want help on the financial side of your next acquisition, from underwriting to deal structure to understanding what the numbers are really telling you, that is exactly what I do. Reach out at PVIFinancial.com and let’s talk about your deal.

~Wendi | Fractional CFO | PVIFinancial.com

Knowing how to evaluate an RV park deal is the single most important skill you can develop as an outdoor hospitality investor. The market is full of parks listed at prices that only work if you accept the seller’s numbers without question. It is not that buyers are careless. It is that most buyers have never been taught a system for pulling those numbers apart and rebuilding them from scratch. They look at the asking price, glance at the occupancy rate, and trust that the broker package reflects reality. Sometimes it does. Often it does not. And the difference between those two outcomes can cost you hundreds of thousands of dollars.

This post gives you the system I use to evaluate every deal that crosses my desk, step by step, so you can build a clear picture of what any park is actually worth before you ever make an offer. Here is the system:

Step 1: Verify gross revenue before you do anything else

The first step in learning how to evaluate an RV park deal is confirming that the revenue number you are working with is real. This sounds obvious but it is where most buyers skip ahead too fast.

Ask for three years of P&Ls and the trailing 12 months of bank statements. Then match the deposits in the bank statements to the revenue reported on the P&L month by month. If the numbers do not line up, stop and ask why before you go any further. Common discrepancies include revenue running through a personal account, seasonal timing differences, or outright overstatement of income.

Also look at the revenue trend across three years. Is it growing, flat, or declining? A park showing peak revenue two years ago and declining numbers since is a very different investment than one with steady growth. The trend tells you as much as the number itself.

Most new investors don’t realize that learning how to evaluate an RV park deal starts with understanding seasonal revenue patterns. Be sure to pay close attention to this.

Once you have confirmed the revenue is real and the trend makes sense, write down your verified gross revenue number. That is your starting point for everything that follows, and the baseline needed in how to evaluate an RV park deal.

A big part of learning how to evaluate an RV park deal is knowing which operational metrics actually matter and which ones are just noise, and verifying gross revenue is definitely number one.

Step 2: Rebuild expenses from scratch

This is the step that separates buyers who know how to evaluate an RV park deal from those who get burned. The seller’s expense number is almost never the right expense number for you as the new owner.

Here is why. Sellers often understate expenses in ways that are entirely legal and sometimes unintentional. They may pay themselves a below-market management salary or no salary at all. They may have deferred maintenance for years. They may own their equipment outright and not account for replacement costs. They may have relationships with vendors that will not transfer to you.

To rebuild expenses properly, go line by line through the P&L and ask these questions for each category:

Is this expense realistic for a third-party owned and managed park? Management fees for a professionally managed park typically run 8% to 12% of gross revenue. If the seller manages it themselves and shows zero management expense, add that back in.

Is this expense complete? Look for missing categories like capital reserves, which should be budgeted at 3% to 5% of gross revenue, and insurance, which many sellers underreport.

Are there any one-time expenses that should be excluded or one-time revenues that should not be counted going forward?

When you are done rebuilding expenses, most parks will show a higher expense total than the seller reported. That is normal and expected. For more on what a clean expense rebuild looks like, read RV Park Expenses That Ambush New Owners: 5 Costs Nobody Warns You About After Closing.

This is one of the most important parts of how to evaluate an RV park deal and the step most buyers rush through.

Step 3: Calculate your own NOI

Once you have verified revenue and rebuilt expenses, subtract your expenses from your gross revenue. The result is your reconstructed Net Operating Income, or NOI. This is the number the entire valuation is built on, and it is almost always different from the NOI the seller or broker presented.

Your reconstructed NOI is the only number you should use going forward. Do not go back to the broker’s NOI at any point in the analysis. If you want to understand why that matters in dollars, read The $312,000 Mistake: What Happens When a Buyer Accepts the Seller’s NOI Without Rebuilding It.

Understanding how to evaluate an RV park deal really comes down to this step. A wrong NOI produces a wrong valuation every single time. There is no shortcut around it, and no version of how to evaluate an RV park deal that skips this step that ends well.

Step 4: Apply a market cap rate to determine value

Now that you have your reconstructed NOI, you can calculate what the park is actually worth. The formula is simple:

Value = NOI divided by Cap Rate

The cap rate is the rate of return the market expects for this type of asset in this location. RV parks and campgrounds currently trade in the 7% to 10% cap rate range depending on location, size, amenities, and quality of the revenue stream. Smaller parks in secondary markets typically trade at higher cap rates, meaning lower prices relative to income. Larger, well-located parks with strong occupancy and diversified revenue trade at lower cap rates.

Here is a quick example. If your reconstructed NOI is $150,000 and the market cap rate for this type of park is 8%, the indicated value is $150,000 divided by 0.08, which equals $1,875,000. If the seller is asking $2,500,000, you now know exactly how far apart you are and why.

For a deeper explanation of cap rates, read The Number That Tells You If You’re Overpaying for an RV Park Before You Make an Offer.

Step 5: Stress test the deal

Knowing how to evaluate an RV park deal means going beyond the best-case scenario. After you calculate value at current NOI, you need to stress test the deal by asking what happens if things go wrong.

Run three scenarios:

Base case: Current verified NOI at your market cap rate. This is what you calculated in step 4.

Downside case: Reduce revenue by 15% to 20% to simulate a soft season, a platform policy change, or a key tenant leaving. Rebuild NOI with that lower revenue and see what the park is worth and whether it still cash flows after debt service.

Stress case: Reduce revenue by 30% and add a major unexpected capital expense, a failed septic system or a full electrical pedestal replacement. Does the deal survive? Can you still service the debt?

If the deal only works in the base case, it is a fragile deal. A park that still makes sense in the downside case is a much safer investment. For a real example of occupancy stress testing in action, read RV Park Occupancy Rate: 3 Dangerous Reasons It’s Lying to You.

Step 6: Model your actual cash on cash return

The final step in how to evaluate an RV park deal is calculating what you personally will make on your invested capital. Cap rate tells you what the asset is worth in the market. Cash on cash return tells you what it puts in your pocket relative to your down payment.

Here is how to calculate it:

Start with your reconstructed NOI. If your expense rebuild in Step 2 was done correctly, property taxes and insurance are already included as line items, which means your NOI is already net of those costs. From your NOI, subtract your annual debt service, your mortgage payment including principal and interest. The result is your pre-tax cash flow, meaning what the park actually puts in your pocket before income taxes.

Divide that pre-tax cash flow by your total cash invested, your down payment plus closing costs plus any immediate capital improvements needed at closing. That gives you your cash on cash return.

A healthy RV park acquisition typically targets a cash on cash return of 8% to 12% in year one. If the deal is showing 3% or 4% cash on cash at current NOI and current financing rates, the numbers are not working and you need to either negotiate the price down or walk away.

This final calculation is where many buyers finally see clearly that how to evaluate an RV park deal is not about whether you like the park. It is about whether the numbers support the investment at the price being asked.

The RV Industry Association tracks industry benchmarks and market data that can help you calibrate your assumptions when you are modeling a deal.

Putting the system together

Here is the full 6-step system in order:

Step 1: Verify gross revenue against bank statements and check the trend.
Step 2: Rebuild expenses from scratch using realistic third-party ownership assumptions.
Step 3: Calculate your own reconstructed NOI.
Step 4: Apply a market cap rate to determine indicated value.
Step 5: Stress test with downside and stress scenarios.
Step 6: Calculate cash on cash return on your actual invested capital.

Every time you look at a new deal, run it through all six steps before you form an opinion on whether it works. The parks that look great after all six steps are worth pursuing. The ones that only look great after step one or two are the ones that get buyers into trouble. A good broker should be also able to explain how to evaluate an RV park deal in a way that highlights both the financials and the guest experience.

Once you understand how to evaluate an RV park deal, the whole process of analyzing cash flow and long‑term potential becomes far less intimidating.

If you’re trying to grow your portfolio, mastering how to evaluate an RV park deal can give you a major edge over other buyers.

If you want help learning how to evaluate an RV park deal, or running this system on a specific deal, I offer acquisition underwriting and can often do it with a 24-hour turnaround. You send me the financials and I hand you back a complete model with all six steps completed, your reconstructed NOI, your indicated value, your stress test scenarios, and your projected cash on cash return. Reach out at PVIFinancial.com and let’s look at your deal together.

~Wendi | Fractional CFO | PVIFinancial.com

RV park deal analysis is where deals die, and yesterday one died on my desk. I sat down with a package on a 23-site park asking $1.6 million and walked away. I am not going to name the park or the location. What I am going to do is walk you through exactly what I saw, because if you are actively looking at deals right now there is a reasonable chance something with the same fingerprints is sitting in your inbox.

I walked away. Here is why.

The financials on this RV park deal analysis told two different stories

The package came with what I can only describe as a handmade P&L. Not a formal financial statement. Not something pulled from accounting software. A document that someone built themselves, by hand, to present the park in the best possible light.

The numbers showed roughly $85,000 in NOI across each of the prior four years, then a jump to $199,000 this year. The seller presented that $199,000 as the number to underwrite to.

When NOI more than doubles in a single year after four years of flat performance, that is not a trend. That is a question. And it is a question that needs a verifiable answer before you go any further.

Any serious RV park deal analysis has to start by asking why that number moved so dramatically and whether the answer holds up under scrutiny.

When I adjusted the numbers, the story changed immediately

I rebuilt the NOI from what they gave me. Before I even got to management fees or real estate taxes, I had already adjusted the presented $199,000 down to $152,000. That $47,000 gap came from the numbers themselves, before accounting for the expenses that were missing entirely from the P&L.

Then I added back a market-rate management fee. It was not in the expenses anywhere, because the current owner self-manages. On a park this size that is a real cost that belongs in any honest underwriting.

Then I looked for real estate taxes. They were not there either. On a $1.6 million asking price asset. That is not an oversight. That is a choice someone made when they built the P&L, and it is the kind of choice that inflates NOI in exactly the way that benefits a seller and misleads a buyer.

By the time I added both of those back, the number I was actually underwriting to looked very different from $199,000.

That gap between the seller’s number and the real number is what the RV park deal analysis is supposed to find, and it is why the work matters before you ever make an offer.

November and December were estimated

For the last two months of the year, the P&L showed revenue listed as estimated based on an average of the previous ten months.

That is not how financials work. You do not average your way to a year-end number and present it as performance data in a deal package. November and December for most RV parks are slow months. Averaging them against peak season revenue inflates the annual figure in exactly the way that benefits a seller and misleads a buyer.

If the actual numbers were not available, the right answer is to say so. Substituting an estimate that produces a better annual total is not a financial statement. It is a guess dressed up as one.

This is exactly the kind of red flag that a thorough RV park deal analysis is designed to surface, and exactly why you should never accept a seller’s financial package at face value without rebuilding the numbers yourself.

The operations were, generously speaking, informal

This park took reservations by phone only. No online booking. No property management software. No digital payment processing.

Rent collection happened when people paid by cash or check. Sometimes the maintenance guy collected it. I say sometimes because the maintenance guy was also living in the one cabin on the property for free in exchange for his services, and his involvement in collections appeared to be, based on what was presented to me, somewhat optional.

There was no formal rent collection system. There were no documented processes. There was no way to verify that the revenue reported on the handmade P&L bore any reliable relationship to the cash that actually changed hands at this park over the past year.

When you cannot trace revenue to a reservation system, a payment processor, or a bank deposit pattern that holds up to scrutiny, you do not have verified financials. You have a number someone wrote down.

The occupancy told a different story than the revenue

Last month, six of the park’s 23 sites were unoccupied. That is a 26 percent vacancy rate on a small park that is supposedly generating dramatically higher NOI than it has in any of the prior four years. And that vacancy was not the outlier. The occupancy at this park swings wildly, which means the presented number is not a stabilized figure. It is a peak number being presented as if it were normal.

When I see occupancy swings that dramatic on a small site count with no formal reservation or payment infrastructure, I want to know what is actually driving the revenue spike this year. I did not get a satisfying answer.

The upside pitch did not hold up either

The seller’s position on the $1.6 million asking price leaned heavily on an adjacent acre with ten lots already laid out for expansion. The implication was that the development potential justified the premium over what the current financials would support.

I understand the logic. I do not agree with the math.

Undeveloped lots are not revenue. They are a capital project with an unknown timeline, unknown permitting risk, unknown infrastructure cost, and zero guarantee of the occupancy needed to justify the investment once built. You do not pay for lots that do not yet exist as if they were producing income. You price the asset on what it actually generates today and negotiate separately for any legitimate upside that can be quantified.

At $1.6 million, with a presented NOI that I adjusted down significantly before even accounting for missing expenses, with no formal reservation or payment system, with estimated months in the annual financials, and with a maintenance situation I cannot adequately describe with professional language, this deal was not priced on reality. It was priced on a story.

Why I am telling you this

Because someone is going to look at this deal when doing their RV park deal analysis. Maybe they already have. And if they have not done this kind of line-by-line analysis on the financials, they might see a park with a big NOI number, an expansion opportunity, and a motivated seller and think they found something.

They did not find something. They found a deal that needs to be priced correctly before it becomes a good investment, and right now it is not priced correctly.

This is the work. Not just reviewing the numbers the seller gave you, but pressure testing every line, identifying what is missing, understanding what the operations actually look like behind the headline number, and being willing to walk away when the story does not hold up.

I walked away yesterday. I will look at the next one tomorrow.

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Read this next: The Seller’s Pro Forma Is Not Your Pro Forma

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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