I have an old 1950s pinball machine in my house that serves two purposes 1) entertainment and 2) a constant reminder about the facts of investing. I believe that this game – titled “Super Circus” – can give more investing wisdom with one nickel than Warren Buffett can in an entire book. So what are the lessons learned? In this RV Park Mastery podcast we’re going to discuss the key lessons my old pinball machine teaches, and how those apply to successful RV park investing.
Episode 9: Lessons Learned From My Pinball Machine Transcript
Have you ever played a pinball machine, maybe in a bowling alley, maybe a Dave & Buster's. You ever put a quarter in, nickel in, had some fun, three balls, five balls for your money? I've got an old 1950s pinball machine made by Gottlieb. It's called Super Circus. I've had it for about 20 years now. And what I like about the machine is, not only is it fun, but it's a constant reminder of all the important parts of investing. This is Frank Rolfe, the RV Park Mastery podcast series. We're talking about lessons learned from my old pinball machine.
So what's the first thing I've learned from my old pinball machine, that it refreshes my memory of every time I play it, and that is a necessity to know how the game works before you really get involved in doing it. You see every pinball machine's a little different. Some you score more points by keeping the ball towards the top of the machine, some the more points at the lower part of the machine, but you can't really be a very good pinball player until you understand where you rack up the points and really how the whole game and machine works.
And that's the same with RV parks. You would never want to start investing in an RV park and have no idea what makes money, what loses money, what makes customers come in, what makes customers avoid your RV park, until you've put in the effort to learn all about it. Now, how can you learn all about it? Well, you can read the various articles I've written. You can look at things online. You can do our RV park course, but whatever you do, you've got to learn how the RV park game is played. Because until you do that, you might lose your money.
Remember on a pinball machine, what you're trying to do is win additional free plays. With an RV park, you're trying to win additional cashflow. You can't do either if you don't know how it works. Sure you might get lucky. That's possible. But as Benjamin Franklin said, "Diligence is a mother of good luck." And diligence, in this case, is learning how the game works from the very basics on.
I love knowing the history of everything I do. I love RV park history. I think we can learn a lot from the past. I want to know on any property when it was built, how it's built, why it was built, the whole thing, the whole macro overview. I suggest you do the same. Number two, on my pinball machine, there are certain pressure points that really rack up the points. And the same is true with an RV park.
In my pinball machine. There's a little niche down there where I can hit this one little thing with the flipper with pretty good resilience over and over and over. And every time I do, I pick up a lot of points. Same with RV parks. So what are the key drivers to an RV park to make it successful? Well, clearly the infrastructure is you want to buy something that has really good bones to it. Something that's institutional grade, that you can get a loan against. And obviously location, absolutely essential. You've got to have a great location. These days, a destination location is the key. You don't really want the over-nighters anymore. Destinations is where customers are heading. That's where they stay. Studies have shown a good destination RV park keeps a customer often an average of up to 14 days.
So that's where you want to be to have the good occupancy. We also know that we want to have a good staff. We want to have good amenities. You want to have good social media presence. We want to have all those many things, good social media reviews. So just like my pinball machine, you've got to figure out, to make your RV park work, what are the essential items? And then focus on those. On my pinball machine, it doesn't matter where the ball lands when you first pull back the thing and let go. All that matters is what you do after that.
And that's how RV parks are. You've got to figure out what makes people come in, what makes the money and also find out what things to avoid. That's equally important. So just like on my pin ball machine, I know what things I don't want to hit because if I do the ball goes down the side and that turn ends. The same with your RV park, through experimentation, you want to learn what's essential, what's not essential. Focus on the good things and try and minimize the bad things.
Number three, my pinball teaches me constantly the importance of volume because sometimes you can have a losing streak with a pinball machine. Ball after ball after ball, you can't rack up any points and you lose and you lose and you lose and you lose, but you don't stop. No one stops on the pinball machine. That would be making you a pinball machine quitter and the same with RV parks. Sure you make offers on a lot of RV parks. It doesn't always mean you'll be successful. You might make a hundred offers before you get one good one, and there's nothing wrong with that. You have to be patient, but you're only going to get to your goal if you continue on an ongoing basis to make that essential volume. Volume is absolutely the key.
Once you know what makes an RV park tick, once you know where you want your RV park to be, the real key is to just keep trying. And when you have your RV park, once again, keep trying. Keep trying new things, never give up. Look at Walmart. Ever read the biography of Sam Walton and Walmart? He would try things constantly. This guy had absolutely no fear of experimentation or pioneering. Someone hand an idea to him, they'd say, "Oh, okay, well, as long as we can test it, let's go ahead and try it and see how it does." Some of the ideas were downright stupid, but it didn't stop him from trying them anyway. And a lot of those downright stupid ideas are what ultimately became Walmart. The very idea of Walmart itself started in a small town with him trying to mimic Kmart with almost no capital.
And he learned a lot by being very open minded. I think problem Kmart had was they were too set in their ways. They were kind of a big corporate Colossus. Walmart had roots and being very much of a startup mentality, always looking for new things and not being afraid to experiment, and always creating more volume of tries. So the key to success with an RV park is make lots of offers. Try and bring in lots of customers. Try new things out. The more volume you do of any endeavor, the more you try things out, more chance you will have to succeed.
Finally, and this is a big thing I've learned from my pinball machine over the years is the real fun isn't actually just doing it. You don't really win any accolades with a pin ball machine. My old pinball machine, it doesn't matter whether you really win or lose. If you win, you have to put less nickels in because it gives you a free game. And with an RV park, if you win, obviously you can win financial security. You can win any number of financial accolades. But the real key item is just the fun in doing it. Many people buy RV parks because they simply like what it entails. They like having a job that gives them both out of doors and indoors. They like the various roles that they self-manage. Other people like to own them simply because they find it excited. They like RV parks. They like nature. They just liked the whole concept. And they also like the fact that they make so many people happy. Because one thing about RV parks is it makes people happy of all ages, both baby boomers love this stuff, but so do millennials.
And so it makes you happy to be involved in something that makes other people happy. Never look at an RV park industry is something that you have to do. It should not be a burden. It should not be, "Well, I hate my job. So I guess I better try and find an RV parks. I don't know what else to do with my life." That attitude will not work for you. The very enjoyment needs to be in doing the thing yourself. Life is very short and none of us really knows a whole lot about life. All we know is that we're here and while we're here, hopefully we're having a good time and we're happy. And if an RV park makes you happy and if owning an RV park makes you happy, that's the most important thing of all.
There may be some people who say, "Well, I don't really want to self manage an RV park, but you know, I guess I'll do that." And then they find they absolutely love it and they love the lifestyle. And it doesn't matter if there's something else they could have done that might even have been more financial rewarding. That's not even the key item. The key item is how do you want to live your life? What do you want to do with it day to day? I think this pandemic has taught a lot of people how truly unhappy they are. Pandemic got people doing a lot of self-introspection because they're in self quarantine, so they're stuck with themselves a lot. And they've done a lot of thinking about their lives and they've decided, "You know what? I'm not really enjoying my life that much."
And if you're not enjoying your life that much, then make a change. Maybe you want to buy an RV park and move into it and self-manage. Maybe you want to buy an RV park and not self-manage it. Maybe you want to go ahead and get better financial stability because COVID is scared you to death. And maybe you say, "You know what? I don't want to live in the city anymore. I want to live in a small town. I want to get out of the whole urban rat race." It's all good. But the key is don't look at an RV park or any investment as the means to the end. It's not that essential in the end what happens to you necessarily just as long as you actually enjoyed it as you went.
That to me is the key. So if you can own an RV park and be very happy every day that you own the RV park, whether you self manage it or you passively management, that is what I would think would be the most important thing. The returns are one thing. Financial returns are obviously important and a lot of fun, but what's really important is the big thing, which is how it impacts your life. And if it's impacting your life in a positive manner, a positive direction, then I say go do it. And if not, then I say go do something else.
This is Frank Rolfe of the RV Park Mastery podcast series. Just wanted to go ahead and give you my thoughts on how my pinball machine is a constant reminder of how the RV park industry works. Hope you enjoyed this. Talk to you again soon.