PVI Financial

Tag: RV park owner

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

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

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

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

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

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

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

    Nobody posts that part.

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

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

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

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

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

    The deal does not hurt you. The assumptions do.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    What most buyers actually do

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

    That is it. Deal made.

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

    The number that actually matters

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

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

    Everything else is marketing.

    The three things that inflate almost every seller’s NOI

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

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

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

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

    What the reconstructed NOI usually looks like

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

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

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

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

    This is the sentence I want you to write down:

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

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

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

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

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

    ~Wendi | Fractional CFO | PVIFinancial.com

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

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

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

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

    Set this up before day one and thank yourself later

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

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

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

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

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

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

    Step 1: Get your banking structure right from day one

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

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

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

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

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

    Step 2: Set up your bookkeeping system immediately

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

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

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

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

    Step 3: Build your pro-forma tracking document

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

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

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

    Step 4: Establish your monthly reporting rhythm

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

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

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

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

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

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

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

    The bottom line

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

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

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

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

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

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

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

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

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

    And what to do about it before the shoulder season hits

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

    And then September arrives.

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

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

    Here’s how to avoid it.

    Understand your revenue curve before you close

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

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

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

    Build your budget around the valleys, not the peaks

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

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

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

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

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

    Use peak season to fund your reserves

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

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

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

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

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

    Watch your expense timing carefully

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

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

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

    Plan for the transition before it happens

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

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

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

    The bottom line

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

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

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

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

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

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

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

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

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

    Because seller financing sounds great until you run the actual numbers

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

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

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

    What is a seller carry deal?

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

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

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

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

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

    1. The interest rate

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

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

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

    2. The debt service coverage ratio

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

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

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

    3. The balloon payment

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

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

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

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

    4. The amortization schedule

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

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

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

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

    The terms that are negotiable and the ones that matter most

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

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

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

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

    A real world example

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

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

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

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

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

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

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

    The bottom line

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

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

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

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

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

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

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

  • 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