Buying an RV park can be a very exciting moment. You are filled with satisfaction and pride at putting the deal together and getting it done. But you also – in the back of your mind – are at the same time filled with anxiety over tacking unchartered territory and if you might be forgetting something. So here are some tips to making your closing go smoothly and your transition to ownership successful
Triple check your survey and title
Make sure you are buying what you think you’re buying. Make sure that the survey contains the land footprint that you are expecting. Make sure that the property has no easements that restrict its use as an RV park, or its future development for another use down the road. And make 100% sure that your title legal description exactly matches the survey. Otherwise, you’re not buying what you think you are, and you could be in real trouble. If you don’t feel confident reviewing these items, spend a little money and hire a licensed real estate attorney to help you.
Double check the closing statement
Title companies are not perfect, and they often make mistakes on the closing statement. These normally come in three types. The first is not correctly labelling which costs the buyer is to pay and which are the responsibility of the seller. If the seller agreed to pay the cost of the survey, then make sure that’s what is shown. The second type of error is when the numbers are simply wrong due to a clerical error, such as the property tax amount being too high or low. And finally, there are instances in which the math error is the result of the wrong date being used for the pro-rations, so you close on the fifth and the pro-rations are based on the seventh. That is often the result of the closing being delayed for some reason, yet nobody ever bothers to correct the closing statement. So just double-check this item.
Have your manager ready
If you are not planning on managing the RV park yourself, then you must find, hire and train the manager before closing. You can never ever own a property without a manager on site. You never know what’s going to happen the day after closing, and you have to be in command from the minute the property is yours.
Have your payment system ready
You are going to have customers the day you close on the park. How will they pay? Are you ready to take credit cards? Do you have change in your cash drawer? This needs to be worked out well before closing, not after. You will kill the business if you can’t accept payment – and you cannot wait a week.
If required, be ready to get any operating permits filed the day of closing
In some markets, you have to get an operating license for the RV park after you buy it. Have everything ready to do this immediately. Don’t get caught in a trap in which you are running a business without the proper documentation.
Have all utility deposits ready and all account information ready to submit
The very day that you close, you want to get the water, sewer, electric, gas and trash transferred into your name. You may need significant deposit money to get this done. Have everything ready to drop off the day of closing.
Have a good bookkeeper/accountant on hand, and the right software
You are going to be responsible for taking in revenue and spending money on day one – be ready! You want to get off on the right foot, as your tax returns, lender P&L statements, and the documentation you need to re-sell the RV park down the road hang in the balance.
Have all new marketing materials printed and ready to go
Just like a track runner is ready for the gun to go off to take off, you need to be ready to start distributing your marketing information the day of closing. Get it all printed and ready to go, get your website built and ready to go live, and have a list of people to call and places to push. Don’t let a week go by before you go on the attack. Your goal is to improve revenues, not let them slide.
Have a “under new ownership” banner printed and ready to hang
If the RV park has a bad reputation, then be ready to advertise that it has sold and there’s a new sheriff in town. And a name change may also be in order. In any case, have all your signage ready to go up on the day of closing.
Keep a positive attitude and follow the British motto during WWII
During the bombing in London, there were signs put everywhere that said “Keep Calm and Carry On”. The same is true for the first few weeks when you buy that RV park. Immediately following closing, you will enter a funky period of minor problems, just like any business. Don’t freak out. Just acknowledge that there is an initial learning curve, and keep on about your business. It is very rare in life when everything is 100% smooth at the start. Think back on when you first went to high school or college. But you became an old hand in a few weeks. Same thing here.
Conclusion
Buying an RV park is a great investment. It’s a great lifestyle enhancement. But you need to make sure you get off on the right foot to even improve your odds of pleasure. Follow these simple steps, and improve your odds of having a great start to the experience!
