Transcription
Welcome to the Good Investor podcast. This is Tim Stone. Today's guest, Michelle Basson. She's an RV park investor all across the entire country, and some of the strategies she uses to buy these properties literally blew my mind. Please watch to the end. You'll see me. I could not sit still. I hope you enjoy and learn something very valuable that's going to help you become a good investor because a good investor is always learning. Let's get to the episode. Michelle, I appreciate you being here and spending time with us. I'm excited to learn about RV parks, and I've seen your content, all the things that you're doing. You're growing very, very rapidly. So, thank you for being here. I want to nerd out about RV parks today, and I appreciate that you're willing to do that with me.
Well, thank you for wanting to do that. Not a lot of people want to. So, I mean, it is becoming a fast-growing asset class, so I'll give it that.
Why do you think RV parks are such a trend right now? You know, I think it's like some people say that it's like the storage unit of the '90s, where it was this little underknown asset class that everybody was trying to get into because they thought that it was passive income. Um, and you quickly realize when you buy a park that it is anything but passive. So, I think that that's kind of one of those myths that's been thrown around that everybody got interested in. Um, but when you do further research, there's a lot of really great things about RV parks. There's so many different types. There's man camps where people go to live. There's affordable housing options. There's vacation parks and resorts, which is what my team specializes in. Um, there's just so many different things, and there's so many different revenue streams that you can add to an RV park, which I think adds to the popularity of them.
So, how did you get your first RV park? 'Cause like you said, it's an interesting asset class to get into. So tell me how you got your first RV park.
I had actually been investing in real estate since 2020. So around COVID, I started buying my first single-family homes. So I built up a portfolio of single-family homes with the idea that one day I was going to retire my husband from his high-paying, high-level executive job. Um, as I was growing, I started to get options for like land and things like that, and I didn't really know what to do with them. I ended up buying some land and building a small mini-resort in Scottsdale. And I thought, okay, well, maybe now I'm going into hotels. The minute I opened it up and I realized how much work and management that involved, I started looking at other asset classes. And so, I still own it. It's still a mini-resort. It's a little boutique resort right side right outside of True North, which I love. Um, but the second I opened that, I turned around and decided, okay, maybe I need to go into like storage units or mobile home parks. I had actually never really heard of RV parks at that point. I had gone camping as a child, but I had never gone to an RV park. My dad was an infantryman. We packed up backpacks and we like hiked into the Rocky Mountains and did like real camping. And so when we were looking at mobile home parks, somebody had sent us a list of mobile home parks and storage units. And at the very bottom was one line about this little RV park in Branson, Missouri. And my husband was like, "Have you ever considered an RV park?" And I looked at it and I was like, "Well, I was like, "No, I don't even really know what they do." And so we kind of looked into it. We visited the park, which at the time, I have to say, was nothing more than a scrapyard. Um, there were a lot of people that had taken it over. It was being mismanaged. It pretty much was just kind of there, and people were kind of, it was kind of catching all the runoffs from every other park.
People that weren't paying or squats. There was a drug, a drug dealer that had taken up residency in it. Like, it was not a great park. I remember actually driving into it and I turned around and looked at my husband and said, "Absolutely not." And he looked at me and he was like, "Okay, so this is where your limit is. Like, you can handle everything else but this." And it kind of took it as a personal challenge. And so I went to work on it and got it from $3 million down to $1.8 million. Um, purchased it um with zero money out of pocket. We did a private investor, um, some seller financing, and the private investor actually sponsored us at a local bank, and they gave us 80%. So, we actually walked in with all of the money plus we had a capex to change it around. And we immediately walked in, moved into it 100% and took over everything, got rid of everybody, cleaned up the place, brought in dumpsters, um, reworked the rules, turned it from this scary scrapyard into a family-friendly park that we consistently get five-star reviews on now.
Wow. So, there's a lot of things to unpack there. First of all, you moved into it and cleaned it up, and you know, dealing with drug dealers and all that's going to be a crazy story, I can imagine. But the financing, I want to break that down for anyone that didn't catch all those pieces. So, you had a mix of a private investor that gave you some capital, also helped you out with a bank to give you some of the capital. You said, also a piece of seller financing. So for someone who hears that and just can't piece together what that all actually means and how to do it, like, can you walk through maybe some of the actual numbers? Because you also mentioned, which probably caught some people's attention, no money out of your pocket. So that...
So this was the first time that I had ever worked with seller financing. So I have to say, like, I was kind of throwing things at the wind to see if they worked, and they did. And so we knew going into it, it was originally a $3 million park. When we underwrote it and really looked at it, we realized, okay, it's not worth $3 million. There's no way we're paying for that. So, we spoke with the seller um and told and got him down to $1.8 million. So, to add a little more to this story, this was in October of '23. So, in October of '23, we convinced the seller to go from $3 million down to $1.8 million after we showed him the numbers and exactly what the park can do, um, or what the park was currently doing because we never buy in-perform. So we looked at it and said, okay, this is what we think the park can do. Once we got the number down to $1.8 million, we started looking at banks. So we actually, once we start working with a park, we start exploring all options across all of them. We start exploring whether they would do seller finance, whether a bank will finance us, whether we can get a DSCR loan, whether we can get investors to come in. So, we immediately start doing that. Um, now that we're more vested in parks, we immediately start exploring all these avenues, which is something that we did with that park. So, immediately we start going to a bank. We find out quickly they will not give us a loan, even though we have a history of real estate investing. We didn't have a history in that particular asset class, and so they would not give us a loan, and they said no. What ended up happening is we then went back to the seller and we were like, we can't buy this right now because we won't get a loan, but we know you want out. Will you give us some seller financing? And he agreed as long as we would close before the end of the year. This is the end of October. So now we had this time clock that we had to go up against. So he agreed and he was like, "What would you like me to give you?" And we didn't know what to say, so we just said 30%. So he was like, "Cool, done." He gave us 30%. We later found out that he would have done the entire thing if we would have asked, but we never asked. Um, we then, yeah, turned around and started looking through our network of people to find a private investor. We actually ended up finding one who had built about seven hotels in Branson, Missouri, through our network of people. He came out and met us, and this was during Thanksgiving. He met us um in Branson. We walked him through what our plans were for the park, and he was like, "Yeah, I can totally do that." So, he ended up giving us about, I think it was around $400,000. So, with that, we were like, "Great. Now, we just need the rest of the money." And he said, "You know what? I'll introduce you to the bank." So, he actually took us back to the original bank that denied us, and literally within 20 minutes of having him there, they were like, "Yeah, we'll sign off on the loan." And so they ended up giving us 80%. And with that, what ended up happening is we covered the entire cost plus we walked away with $500,000 in capex, and we had put a $70,000 acquisition fee into the purchase price so that we actually earned $70,000 just by closing that park that day. Then we walked into the park. And as we walk into the park, because of all of the future bookings that we had, the current or the previous owner then handed us a bag of cash that had about $30,000 in it.
So you're walking in with all your budget to fix the place up plus $100,000 extra. And and lessons in there were having a good network and asking. So, you could have asked for more seller finance, but the fact that you asked for it, you got it. Because a lot of people will go to the bank, say, "Hey, we want to do this loan." The bank says no. And like, "Okay, we can't do the deal." But you just go to the seller, "Hey, we can't do the deal this way. Will you give me seller financing?" And he says, "Yes." And then, "Okay, we got to connect the dots here. Let's ask our network who's in Branson, Missouri." You find someone you know, and now the deal works. Where a lot of people, probably 99% of people would have looked at it, said, "Oh, this isn't worth three million," and probably stopped there. [laughter] You know, they probably would have stopped at this property is not worth three million. I'm not even going to spend time on it. Uh, but you just kind of pushed in every direction, got the deal done, and walked into it profitable. So, that's awesome.
No, it was, it really is a lot about asking the right questions, finding out exactly what the seller's goal is, finding out how much the park actually produces, and understanding what the numbers mean. And that's kind of how we do all of our parks now that we're a little more educated on what we're doing because now currently we own eight parks across the country from Alaska to Florida. Um, we we run about a thousand pads. I I interrupted you, I think, because of the Wi-Fi. I said, "That's literally across the country, Alaska to Florida."
And so because of that, like we've learned so much just dealing with different sellers and different goals and different things. A lot of the things that we find is they're just tired. They built up something that they're ready to exit. Their kids don't want to take it over, and now it's time for them to kind of go on and live their own life. And so when we can figure out exactly where their pain points are and exactly what their goal is, we can sit down and build backwards from there to figure out how to get them to exit so that we can get into the park with as little money as possible out of pocket, um, and be able to run it so that we can pay them basically forever or until their loan is up. And so they become our bank.
So, how do you find these retiring RV park owners that are willing to sell for no money down?
Our first park came off of, I think it was a Craigslist listing. And so somebody saw it on a Craigslist listing and sent it to us, and that's how we got into our first park. Once you get into your first park, it gets a little bit easier. People will start recognizing that you are a park owner. Park owners like to sell to other park owners, or at least people who understand what's happening because they're so intensive and time-consuming and they require so much management that especially if you're going to sell or finance a park, they want to know that you know what you're doing. And so that plays a big part in getting your next park. So once we opened up the doors by getting our first park, our second park, third, fourth, all the rest of them came a little bit easier. As we're going, they are getting easier to acquire, and they are coming closer to the terms that we want most of the time. So our second park was 100% seller finance. She even seller financed our down payment. And...
And what do you think was the difference between the negotiations in that first one to the second one?
We were able to ask. Like, I think really that was what it came down to is one, we kind of understood a little bit more about what was required of the park. We could talk a little more knowledgeably about what we were going to do, especially since they had built this park themselves, and they built a beautiful park. They didn't want it to be run into the ground by the next owners. And so understanding what we were walking into, understanding the passion and the heart that went into building this place, and being able to speak to that, and being able to find out what their goals were, ultimately really helped. But also knowing if we would have just asked for the full 100% seller financing, we probably would have gotten it, or at least we would have been able to start negotiating from there and gotten more than if we just asked for the 30%. And so when we asked, she gave it to us, and we actually just cashed her out. So now we fully own the park.
So now everybody's happy.
So everybody's happy. They are retired, living in Florida, enjoying life now. So...
And they were able to cash out of what they had built and put so much time into it, which is awesome. And then you're just, you're catching them at the right point in their life where it makes sense to retire. So, with that being said, how many of these opportunities are out there with these RV parks that have retiring owners?
There are 17,000 parks, I believe, in North America, and about 85 to 90% of them are owned by baby boomers that built them way in the day. And a lot of their children don't want to take them over. Some will, but a lot of them don't because they saw their mom and dad work basically to the bone and create these incredible vacations for everybody else but themselves. And so they don't want to take them over. They've all gone off and gone to school and done their thing. And now, you know, their parks are are potentially going to close if nobody takes them over. And so that's kind of the thing is it's like the difference between me and a lot of other groups is that some of the groups will come in and they make them more corporate. So they make them the same cookie-cutter place over and over again, and it doesn't always work that way. Not everybody wants to go to the same Marriott day in and day out. Some people want to go to a boutique place and they want to see something different. And so our goal is always to acquire these parks and keep them as true to the vision as we possibly can while upgrading the amenities, adding more experiences, and completely, you know, making these people who have fallen in love with them bring all of their people to it, too. And that's actually why we do so well in numbers. Um, right now across the United States, I believe that most campgrounds are down. All of our campgrounds are up 5 to 20%, depending on location, from this time last year.
So what's the difference? You said you make them a little more boutique, more of an experience. Is that is that the difference between your parks and everyone else?
There's a couple of different things between our parks and everybody else. One, I feel like we put in marketing. We let people know that they're there. We give people perks for bringing people in. Um, we're kind of out there. We're showing those experiences. We're actually sharing those experiences online where you can go out and see my content and you actually see our parks, you see what's happening in the parks. We're actually building out those platforms now to where people can see more of that. Um, when you go to their specific Instagram pages and Facebook pages, we want people to understand the experience, and each one of our parks has a different experience. So, if you go to our fish camp in Florida, it is all charter boats. It's a fish camp. It's very rugged, but it is a perfect place for families to take their kids, their friends, the guys to go do for a fishing trip. We're getting ready to add some things. We're going to add some water features and some cushier cabins to that one so that when the guys all go camping, your wife can come and stay in the other side of the park. If you want to go and rough it in the original park, she can go hang out with the water slides and all the kids in the other side of it. You can go visit her. So, um, you know, we have a park in Lake Ridge, uh, in Virginia that is completely family-friendly. We do karaoke nights every weekend. They do activities every weekend. They have themed weekends. Um, we do all kinds of different things. There's craft rooms. It's got a full arcade. It's got water slides. It's got a fishing pond. We've got paddle boats. Um, you know, we've just right now we're currently working on making a completely dog-friendly park where, you know, your furry friends are more than welcome, and we have walking paths for them and specialty items for them, and we've got free dog washes for them. So, it's like all these little things and understanding who goes to those parks and catering to that, because people already love the parks. We buy them when they're cash flowing. The last thing I want to do is alienate the guests that already come there and make it so that it's not cash flowing. What I want to do is I want to create an environment where they want to bring more of their friends who are just like them. That makes it...
And I bet you get a lot of repeat customers, and you're going to see over the years people possibly even start booking in advance because I, I don't know if a lot of people know this, but I kind of grew up in the short-term rental business. My parents had a vacation rental management company, and they were managing people's cabins in North Georgia. And that was the thing, like the ones that had something really unique, people would come for Thanksgiving and they would book next Thanksgiving before they left. And the little thing, the one that was the most profitable, um, that my dad ended up getting into was making it handicap accessible because there's not a lot of those. And when someone finds one that's accessible to them, they're going to keep coming back. And, you know, it's good for everybody. It's great for them because now they have a place for a great vacation. It's good for you as the business owner because you've got repeat predictable income. That's kind of what you're building across the different ones. So you've got fish camp, dog, like any other exciting ones coming up, exciting plans for the RV parks?
Well, we actually currently are buying a coastline in Washington, um, where they, it's actually two different parks. They offer, they have RV sites, motel, campsites. Um, and what we're doing there is we're going to keep it true to what it is because it's a very popular fishing destination, but we're going to acquire the entire coastline. We're going to update some of the amenities, hoping to add in some like fun things for the guests that have worked in other places. Um, we actually want to buy some land that's above it that's owned by the same original owners of it, and we're going to put like an entire glampground up there. So, it's a little different, but we'll be able to cater to all ends of that of that whole sphere. So, from the guys who just want to rough it, to the families who want a nice hotel room, to the people who really want a nice glamp area, we'll be able to cover all those bases.
And the business of being a park operator is very different than the business of being a real estate investor. Like, are there, as you're becoming a better operator, you'd say you're finding it easier to acquire them and be a better investor?
I think, you know, RV parks and campgrounds, they live and die by their operators. So, if you're not a good operator and you're not really understanding who comes to your campground, how to upgrade it, how to earn the trust of the people who are already there, how to be able to build it into the next century, I think you're going to lose a lot of people along the way. And people, that's what happens is, you know, these mom and pops have built these RV parks, and they did a beautiful job with them, but what happens over time is they get tired. It's exhausting to take care of people on vacation. They want so many things. You spend your money, you want things to be done a certain way, and it's exhausting. And so, they've spent all of their time catering to other people, and they're tired. And so, the idea of adding new things or adding new amenities or adding new revenue streams is exhausting. The the idea of trying to maintain that for them is just tiring. And so, we come in with fresh eyes and we look at everything and we say, you know what, these are the things that work really, really well. These are the things that are not working well. Let's get rid of those and change these over, and let's streamline these. Then let's put in good management. Put in good training across the board. Give everybody somebody who's accessible that can help them answer questions right away. Put in online booking, put in web pages, do all the things, and let's, you know, increase what we're already doing and see how it goes. And it worked out really, really well. But I think it's also having the right people in the right places. So, it's not like we just one day decided we were going to go out and, I mean, well, we did, but once we realized what we were doing, we realized we need people who specialize in specifically this. And my husband spent 30 years in hospitality. And so him, my director of operations, who also spent 30 years running a franchise of restaurants across the United States, and my marina expert who spent his career in marinas and yacht clubs, bringing us all together where I get to be the visionary and they understand how to integrate it, I think works really well because I don't get burnt out and say, "Oh my gosh, I can't think of any more new things." I'm constantly thinking of new things, and they're constantly figuring out how to plug them into all of our parks.
Okay. My next question, and this this might only be for me, but how are you finding good talent to help you with the operations across the country, and especially in a lot of these rural areas where you don't have a big city to pick the best of the best out of five million people? Like, what's the, what's the key to finding good talent that you can trust with these properties?
A lot of that is being true to like who you are and what your vision is and being able to explain it to other people because we have found a lot of people who have come to us just because I'm able to explain my vision and they want to work for us. So like our marina director, perfect example, he sent us his resume off of LinkedIn and he was like, "I just want to be a part of what you guys are doing." And so we weren't ready for him when he first sent it to us, and after a couple months, we were like, okay, we've acquired a few more marinas. We need an expert. And he was ready to come on board. Um, I really lucked out in certain instances. Um, with my husband being in hospitality for so long, actually, one of his biggest clients quit his job. The man who ran franchises, he quit his job and came and worked for us. Because he was like, "I don't know what you guys are doing, but you're having a lot more fun than I am, and I want to work for you." And so he, I went to him to actually, we were buying a park that had a restaurant on it, and I was like, "If I pay you to consult to help me streamline this restaurant, would you do that?" And he was like, "I'll actually do better." He goes, "I will come on as your director of operations if you want to hire me." And so we were like, "Yeah, that makes a lot of sense." And he has been the best thing because he really has streamlined not just our restaurants, but every part of our portfolio and has been able to kind of like streamline it all down and cut expenses and get everybody trained across the board. And as we're growing, we're just finding more and more talent that way. And, you know, one of my best friends runs one of my largest parks actually. Uh, so growing the brand and putting it out there, I guess also helps as well.
You said you just from LinkedIn found one of your best hires as well. Uh, so being an RV in the RV park business, you're going pretty heavy into social media, and that's how we got connected. So, what is the, what's the purpose and benefit for you to be creating a ton of content and building a personal brand as an RV park operator?
I actually kind of went back and forth on that, but because I didn't really understand the importance of it until I really started doing it. And then once I actually started doing it, I realized not only did it tell everybody else my vision, but it brought more people to the table. It also brought more investors to the table, but it also gave everybody the opportunity to learn from what we were doing. And as we were doing this, not only were we bringing in more people, but we were also increasing the views of people in our parks. So people wanted to go to our parks more, which I also think helped increase, you know, that all helps increase the revenue. So we're bringing in investors, we're bringing in new guests and clients, we're bringing in new team members, and we're able to be out there and share everything. So it became not so much about building my brand, but it actually ended up becoming more about just giving everybody the opportunity to kind of see how we were growing things. And it became more fun.
It is fun, and it it's just like an accelerated way to meet more people and then get stuff get stuff done across the country because now maybe I don't know, maybe you don't know someone that's in rural Tennessee, but you put enough videos out there and get millions of views, and oh, now you've got fans or followers there that you can connect with. So, uh, my next question is one that I think a lot of people are probably like on the edge of their seat trying to figure out is, how do you go about approaching these people and saying, "Hey, I want to buy your park"?
Well, you know, at first it was very awkward. It was, um, you know, how how do you go up and talk to somebody? Because most of our parks come off-market. We worked a lot with brokers. A lot of people give brokers a bad name, but the truth is is that they're are people, and if you treat them well, they'll treat you well. And so, we've worked a lot with great brokers who bring us deals before they even hit the market. So, we are pretty much on every broker's VIP list where when they hear of a park getting ready to go on the market, we're one of the first groups that they contact. They send us all the information, and we work with them to go through it. Um, and then they give us a warm introduction, which always is better than a cold intro. I'm not the person who's going to call you, cold call you, and be like, "Hey, do you want to sell me your park?" I feel like that's a little invasive, and it may work for some people, but it doesn't exactly like it's not good for our time. Like, we don't have the time to be calling 17,000 parks across America to see if you potentially want to give me your park or if you potentially want to sell or, you know, to nurture those relationships. So having a good relationship with a great broker who will start opening those doors for you is a really great way to like get in the door. Once you start getting in the door, people, the RV industry is not a great huge industry. We all tend to know each other. And so we know when you own a park, you probably know somebody we know, and that opens up a door later. So now I do get a lot of parks off-market before they even get to the broker. Somebody will send me their park and be like, "Hey, we're thinking of exiting. Will you take a look at our park and see if there's anybody in your network who wants to buy it before we take it to a broker?" That makes absolute sense because either they're going to go to someone they know that buys parks. Like if if I'm an owner, I'm ready to retire. I want to sell. I know someone that wants to buy it, or I'm going to the RV broker that's probably been following up with me the last 20 years, and they're going to get the listing and sell it. And that's kind of the way it works.
So, uh, if you haven't had your foot in the door and time to build that credibility or done the deals with the brokers to where they're going to put you on the VIP list, how would you recommend someone starts buying RV parks right now?
You know, I think there are a lot of great ways to get started. I think first, you can, if you're an avid camper or if you're somebody who already RVs, going to those parks that you love anyway and talking to those owners and getting to know them is a great way to get started. Have you ever considered selling your park? Do you know anybody considering you're selling your park? This is my vision and what I want to do. I think that is a really great way to tell somebody in the industry, like, listen, when you're ready, or if you know somebody who's ready, please connect me because the truth is is that all of us want to be able to sell everything without having to go through all these major hassles of putting it on the market and doing all these things, right? You are going to sell, you know, a short-term rental. If you know somebody who wants to get into that business and they're going to give you a fair price, you'd probably go there before you turn around and go find somebody and put it on the market and wait a hundred or, you know, whatever amount of days, especially when it comes to an RV park. Um, they stay on, they tend to stay on the market for long periods of time, months at a time. And so, you're going to go and you're going to want to talk to somebody and you're going to want to get in the door with somebody. If that's not an option for you, meeting brokers and knowing brokers that are in the industry that specialize with them and selling them on your vision is a really great way to do it. Also, the third way, and the way that I like to do it, I I personally recommend is that, you know, my team actually helps people get into RV parks, their first park. And so, what we do is we actually walk you through how you underwrite it, how you evaluate it, what you're looking for. You do the seller calls with us, and then we walk you all the way through. We're actually, we've got three people under contract right now on brand new parks.
Awesome. So, if they want to do a deal with you, they can, or you're teaching them how to do it, or a mix of both?
We do a little bit of a mix of both. You can either do a deal with us and be a partial owner, or um, you can invest with us, which is always a great way to become an owner and not have to do any of the work. Um, and then there's always the, you know, you want to buy your own park, we're there to facilitate it. We take a small portion of the equity, and then you walk into your first park, and we're there to help you along the way. And that's actually a really great way to do it because then you're not just left blind. You have somebody to call when you're like, "What do I do? What vendor do I call? How does this work?" So, it's a nice way to have somebody. We call it our handholding program.
You don't know what you don't know. And, uh, someone who's operated parks from Alaska to Florida might know a little bit more. Um, that's good because it kind of hits every piece because there might be someone listening that's like, "Man, it sounds great. I see it'd be very profitable, but I don't want to do it. Uh, can I give you my money?" So, you have that option as well.
We actually have investors who will go work in our parks for a couple weeks just to kind of see if it's something they want to do, and they quickly realize it's a lot of work. And some people are like, you know, this is great. But a lot of them are like, you know what, we're good. I'm just going to keep doing what I'm doing. You just, you know, send me mailbox money. It it depends who you are. A lot of people, I think, are better off putting their money into some sort of fund than to trying to run it themselves.
Yeah. Yeah.
So, on the, we've talked a lot about like the operation size and making them profitable, but if someone were to buy, um, or what's the average size RV park? Or let's just say a million. If someone were to buy a million-dollar RV park, like how much could they expect to make?
Now, we don't buy anything that's below a 10 cap. And so for us, a million-dollar park would mean that it does probably about $100,000 NOI every year. Um, with that, that actually would be too small for us to personally buy. RV parks are very different, and they're so diverse in so many different ways from size to what they provide to location to everything. And that's one of the things that I do love about this asset class is that there is no wrong way. And so, you know, you may buy a park that only has 11 spots and it's next to a river, and it could do gangbusters in numbers just because of the location and what you have, and people have the niche for that. That's exactly what they want. You can have an RV park that has a thousand pads and does not do as well because it's just not what people are looking for. Is. So there's no really right or wrong answer. The question is, is there's some basics. How much does it produce? Does anybody know that it exists? Do you have an online booking system? And do you have great Wi-Fi? And are you in a place where people want to visit? And if you can hit all those, people will come. Um,
Do you, do you put Starlink at a lot of the properties? Is that how you get Wi-Fi, or how does that typically work?
Actually have not done Starlink. Um, we know some people who have done it in the smaller parks, and it's worked really well. Crazy enough, I also own short-term rentals, and so I do have Starlink in like my beach houses. Um, and it works wonderful there. But with us, we actually like to have our parks a little more hardwired with a little better Wi-Fi system because we want to have the best Wi-Fi. Here's the thing is when you have great Wi-Fi in your park, you keep your guests longer, and they come and want to stay with you. A lot of people get to work transient now, and they get to work from home, and that doesn't mean that they can't work from their campers. So, if you're bringing your family out to one of our parks, say, you know, out in Cherokee, North Carolina, one of our newer parks, your kids want to stay there. They want to splash in the river. They want to have fun activities. They want to do all the things. You may not be ready to leave Monday morning, but you have to go back to work. If we have great Wi-Fi, you can stay, and your kids can continue having fun for the rest of the week. So, the price of putting out new Wi-Fi has definitely benefited us in a lot of different ways. It keeps our guests, it keeps them coming back, and it keeps them staying longer.
Good tip. That's a really good tip because if, because a lot of them, I'd imagine, are kind of out in the woods and maybe don't have great cell service, and if there's no cell service, no Wi-Fi, like some people love it, but most people can only stay off the grid for so long. Um, versus worried about what's going on in the world or your family, or you got to be somewhere, got to contact someone. Um, I should have asked this earlier, but when you're talking about using bank financing, what kind of loan is the bank do on an RV park?
You can do different kinds of loans. You can do an SBA loan, you can do a DSCR loan, um, you can also do traditional loans. So, you know, it just depends on what your bank wants to do and what the park is producing. We are currently doing a lot more DSCR loans right now, um, on partial parts of the park. We don't usually do a all of it, but we'll do it on a little bit. We usually bring in investors, do some seller financing, and then for the rest of the portion, we'll do like a DSCR loan. Um, but we've done traditional loans. We've never done an SBA loan, but we do know people who have done SBA loans for their parks. Um, so I think it really just depends on how creative you can get and how creatively you can stack your your your deck and your funding. But I also think that it comes from just being creative. Like a lot of people think that there's only one way to do things. They don't realize that you can stack it, or they don't realize that there's multiple different ways to make the door open. They just think, "Oh, I'm going to apply for this loan." And the bank said, "No, so now we're done." They don't realize like, "You could go find investors. You could, you know, bring in a DSCR loan. You could do an SBA loan. You could sell or finance it. You can creatively stack three or four of those options together. You could go to a different bank. You don't have to stay with one bank. You don't necessarily, you don't get the best rates from a large national bank a lot of the time. We've worked a lot with local banks when it comes to our parks because they understand what's going on in that specific park.
And this might be a little too nerdy, but what's like the loan to value and what are they using as collateral on the loan? Because a lot of it is just land, and then the business just running the business is where the income comes from. Is it different than other rental properties?
Well, here's the funny thing is that it is a land business. So, I'm basically a land baron. I own land in some of the best places in the world, in the country. Um, coastlines, fishing holes, beautiful countryside, places right next to tourist places. Um, I just happen to monetize it by sticking a business that cash flows on top of it. So, the property itself is worth a lot of money. Like, we have a park where the land itself is worth $5.8 million. The business is worth 5.2. We bought it based on the business. We didn't buy it based on the land. And so, we, if you put them together, the whole thing is worth over $11 million. But...
And you bought it for 5.2?
For 5.2, and we produce off of it. That park probably does about 6 to $800,000 in NOI every year. So we can pocket about two to 300,000 of that.
Off of just sitting on valuable land that's going to go up and up. Now I'm excited. Now I want to buy RV parks because I want to buy some of the best land in the country for the value of the business on it and just sit there and cash flow and wait for the land value to go up and then sell it to someone like me when I'm old and they're young and move to Florida.
No, I mean, but that's the beauty of it, right? So, now I've got this beautiful land. I've got this cash-flowing business on it. I'm protecting the downside for investors because the land is still worth something no matter what happens to the business on top of it. If I have a park right now in Branson, Missouri, the land on top of it, I could literally build a motel on it if I wanted to because it's a commercially zoned piece of land. It's in the middle of the city. It's worth more than the business that's actually on top of it right now, but the business is increasing because we're continuously adding things to it. But if something were to happen, I can demolish the park, which is really not, you know, a lot. It's concrete pads and a store and a a community center. Um, and I can put a mobile home park, or I could put a multifamily, or I could put a hotel on it.
Man, that was the key for me. I think I'm going to, I'm going to buy an RV park next month and I'll be calling you for for some handholding. So, I think that it's like a lot of people don't realize like there's so many different aspects to it, but not only that, like you add businesses to it. So, now I've got this RV park on it, right? Got this beautiful land. I've got an RV park on it. People come there because they want to be in nature. I now own this business, but then I add an arcade to it, which gives me a couple thousand um a week. I own, I put in golf cart rentals, which in one of my parks does about a hundred to $200,000 annually just in golf cart rentals. Um,
Golf cart rentals?
Um, I do day passes. I do a quarter of a million dollars in day passes in one of my parks where people in the community just come to spend the summer because I have water slides.
Our video guides cannot believe you make $100,000 off of golf carts. He's looking at me. What? Great thing is that when it comes to the golf cart rentals, I don't necessarily have to own the golf carts to do that. So, I can rent them from a golf cart company. I rent them for about $2 to $300 a month. I rent them out for $80 a night. They're booked solid throughout.
the season. My return on that is huge. So, my $20,000 is actually my net profit. It's not my gross. I bet you could get some sort of 0% business financing and then depreciate the vehicles and make a similar amount of money too and save on some taxes. But at this point, I don't know that's a problem.
Now, last year actually, we had about $8 million in depreciation for all of our investors. Um, but you know, and that's the other thing is we are one of the biggest depreciating asset classes across the board when it comes to tax advantages. And so I mean I get to depreciate everything from my pads to my store rooms to my equipment. Um we bought new tractors for a lot of our parks last year because we were upgrading and we were expanding and we got to write off 100% of all of that.
So that's one thing about this as a land strategy. You because the pads you can depreciate. You mentioned if you were buying land you can't depreciate dirt but you're putting the pads you're putting equipment. This is a, you know, it's a long-term land investing play that cash flows and has tax benefits.
So, I can depreciate all of that and my store rooms and all the buildings that I put on it. Um, you know, any upgrades that I do, all of that stuff comes into play.
Awesome. This is going to be really nerdy for anyone that's like a beginner, but I'm like excited talking about this stuff. [laughter]
Good stuff. Like it's honestly it's, you know, it was probably one of the best. Like I started I started in long-term rentals and I was like, "This is going to be my key. This is how I'm going to get my husband retired out of his W2." Um, when we started in campgrounds, my husband actually quit his W2 and now he works for me. But now we have, like I said, my friends all work for me. We just added health benefits to all of our full-time employees across the board. um which is something that is not also not very common in the RV industry because they're so transient and that kind of keeps loyalty and people coming back day after day. Um we pay people some of the best in the industry because we want everybody to have a good experience. Uh, so, you know, I think there's so many different benefits to it, but also building out that brand, bringing in the right people, getting the best guest experiences don't only help our guests and our parks, but it also ultimately helps our investors.
So, would you say that RV parks are the best investment to make right now?
100% think that RV parks are the best investment to make. I think the only thing that could potentially rival it might be probably car washes. One of my partners actually is really big on car washes and so I could say that would probably be a pretty good rival um because they print cash pretty well. Um and it's actually kind of a side hustle that I'm considering going into. [laughter] Yeah, th this reminded me of car wash is a lot of the benefits because that's another thing where a huge piece of the car wash like operation like everything is a depreciating asset that's going to save you money on taxes and it prints money every day and you can have monthly memberships and people pay for it and they don't even come to it and again it's probably pretty guilty of that all the time. I have memberships that I don't even use. [laughter]
They get you because unlimited car washes is cheaper than paying for two. So you go ahead and sign up and then you don't even get two car washes. But um but it actually the guy that um we're partnered with like he does car washes and so we're working right now on building out RV dog washes and car washes in each of our parks. just combining all of them and that way you know 90% of our travelers travel with their furry friends. All of them have an RV. Most of them have [clears throat] an extra car on them. And if they've traveled, especially when they travel to our Alaska park, they go 5 hours from Anchorage or Fairbanks to our park in Vald. That's a lot of dirt, wind, you know, sea salt, all kinds of things that are going on and they want to wash when they get there. And so one of the big things that they do is they wash everything inside of their RV. So our laundry mats are always really busy, which we also profit on. And then adding in a RV wash, a car wash, and a pet wash is just a huge upsell.
So do you serve alcohol in any of the RV parks?
Actually do in some of them. In some of them, we have a liquor license. So we have a bar and grill in one of our parks that does really well. I think they do around $3 million a year. The a big thing in a lot of cities is the dog park that serves beer. And I think that at an RV park, like you're camping and there's a dog park that serves beer, I think that would print money as well.
No, I mean, you know, it's really surprising. It's like my thing is is I know when I go on vacation, the last thing in the world I want to think about is all the extra little nuances of things that I want that I need to do. And so like if you go to one of the campgrounds, you can do an upsale. like when you're checking in, um not when you're checking in, but when you're checking out, when you're booking your reservation, do you want to add eggs and bacon and firewood and ice to be at your campsite when you check in? Well, yeah. That's one last thing I have to think about. Do you want to, you know, have a dog wash that you can have your dog give your dog a bath with free soaps as many times as you want to while you're staying with us? Well, yeah, we've got a lake there. I want I'm going to have to wash my dog a couple of times. Like, you know, these are all things that when you add them to the park, they're just extras that are convenient for your guest and they keep them on your park. Adding a restaurant, adding a bar, adding, you know, food service, an arcade, extra things like that. We did last year a couple of our parks, we actually partnered with a local humane society. We brought in a fall festival. They brought in all the animals from the humane society and they actually adopted them all out. We cleared out two shelters and just brought everybody in the community to our park for a big festival that and they all partied with our people on the park and used our pool, used our you know, but what did that do for that one weekend? It created everybody knowing that we were there. And so now this next year, our park passes are up because we worked with the community. We let everybody see what we did. We gave them a free weekend in our park. Like it was a great way to sell ourselves without actually selling ourselves.
Yeah, that's awesome. There's so many different revenue streams with this. Like like the upsell on the checkout page. Like that's like digital product online marketing 101. I don't I've never heard of people doing that with RV parks. That's awesome to me. I'm also
Well, I mean, we have charter boats in one of our parks and this year we're adding Do you want a cooler full of beer and sandwiches on your boat when you get there at 5:00 a.m.?
Yeah. Because you know who usually plans all of that for you? Your wife. And she's not there on your man's fishing trip. So now you don't have it's in the boat. You just get off out of your car, you walk onto the dock, you jump in your boat with your captain, and your cooler of sandwiches and beers is already sitting there.
Yeah, I I want to buy an RV park now. This has got me more excited than anything. Um, and I love multif family and I'm really excited about a lot of the multif family projects we're working on. But Michelle, this has been awesome. I want to ask you a question I've asked all of our guests because at Good investor, we like to say a good investor is always learning. Like what is something that you are learning right now or trying to learn?
I'm constantly learning. Um, I think I learn with every park that we do. I learn new things about infrastructure. I learn new ways that, you know, you can add value to a guest. I learn new ways that guests like value. I learn new things about people. I think one of the biggest things that I am trying to learn this year, well, one is AI because we all need to be learning AI. Even though I'm in a very um humanto human interaction business, AI is something that will basically streamline everything in all of my office systems so that my office people can spend more time interacting and having that one-on-one guest time. So, I definitely think AI is something that I'm learning. I've been building out training systems and everything the last couple of weeks, and I am so not a computer person. I am like a hands-on person. This whole computer thing has been crazy for me to learn, but with all the new tools, it's been so much easier than it's ever been in the past. And I think being a good leader, I think that's something that you always have to constantly be learning. And now, as my team is growing and I'm getting more and more people in, I'm learning what it takes to be a good leader. So, I think learning from people who have already done it. um one of my mentors um has exited nine businesses to Berkshire Hathaway and learning from him and all of the things that he has just given me and the little nuggets that he's taught us. It's been eyeopening to see where you fall short and where you need to like improve on and who you need to hire to make sure that maybe if you fall short somebody else isn't because we can't be all things to all people. that. Yeah. Having that mentorship and being a mentor, it's like it's huge for everything operating successfully. I've got one one more question I like to ask and I don't ask everybody this, but I can tell you're both. Do you think you're a better investor or entrepreneur?
I always thought I was a better investor and now I'm learning that I'm actually a pretty good entrepreneur. So, like I think, you know, jumping into real estate investing was kind of on a whim. I I don't know how much of my story, you know, but I actually did it without really telling my husband. I went out and bought a house and he was on the golf course and I called him while he was on hole nine and kept leaving him messages and he wouldn't call me back. So I kind of always joke that it was his fault cuz he didn't answer the phone. So, um, I bought our first investment property. Um, and by the end of the weekend, I already had it rented out. I hadn't closed on it yet, but I had it rented out. I had a contract and I had a deposit. Closed on it in 30. Uh, he was actually so impressed that I was making an extra $700 without doing anything in a weekend that he was like, "Could you do it again?" And so I went out and did it again on Monday and actually closed on both those houses on the same day and moved tenants into them both that night. Then did that again for about 18 months I was doing that um until it got to a point where the bank was like we're not giving you any more loans. So um you know I always thought that that was going to be like my avenue like I'm going to be an investor. This is what it is. And I was kind of resilient. uh or I was kind of resistant to taking on any new investments. When I got into the RV park industry, I really kind of thought, I'm going to be investor. It's going to be a long-term park. I don't want to have to deal with it. And when I realized what I had, it was kind of an eyeopening moment for me where I was like, no, no. Like, I should be creating outdoor experiences for family. The most important thing to me is my family. And um you know I I lost my son when he was 6 years old and I have two daughters and actually his 23rd birthday is tomorrow. Um but realizing that I had this vehicle that I could ex like make these outdoor experiences for these families and I could carry on this family legacy is what it became more of for me. and making sure that these legacies and these things that these families built over time that all of that blood, sweat, and tears was not for nothing. And being able to bring it into the next century while giving them an avenue to exit so that it continues on and their name continues on was kind of a great thing for me. And when I started realizing and seeing the families actually connecting and being together and fishing like kids fishing with their grandfather or you know cousins giggling together and making new friends like all of that was like a whole new world to me and I just fell in love with a whole different asset aspect of what I was doing and it became more about the entrepreneurship and the creating these outdoor experiences than it came about investing. And I think when you have the right heart in it and you build it and you understand who the people are behind it and who the people are that are coming to it, you ultimately will create something that creates money.
Wow. That that's awesome. I I do like the continuing the legacy of the people that put so much into building it part of that because do a lot of them like have the park named after their family name is do you see that a lot? Yeah. Like that's a it's hard to let go of that but it's also hard to uh just let it die and fall into nothing when you're done with it and you can't run it anymore. Uh, so I How sad is that? You put so much money and time into it and everything you have and all of a sudden it's just a a lump of dirt. that opportunity in so many businesses right now that like it's exactly like you said and and we see this a lot with uh you know commercial real estate and single family homes we buy is somebody built up a portfolio and built up a good life for themselves but their children are in their 40s and 50s and have their own careers and families and they live across the country and well when mom and dad retire they don't necessarily want 40 homes in Georgia when they live in Chicago and if they could get a a check every month that keeps coming even after their parents pass away. That's setting up their family better than trying to hand it off to them through probate when they pass away and they fight over it and you know it gets squandered because you just they just get a lump sum of $12 million. It it really is a better exit for him in a lot of ways. any business, RV parks, real estate, service businesses, whatever. I think there's a ton of opportunity for people to do this right now. And you don't have to have ton of cash to do it.
I mean, I have to say I have gone into every RV park that we have ever gotten. Um, some of them 100% seller financing, but all of them with no money out of my own pocket. Them. Them. every single one. I have never put a dime of my own money into into our parks.
That's amazing. Where can people find out more about you?
Actually, you can either follow me on Instagram at Michelle Bisan, um, which a lot of people do. Um, I also have a private Facebook community which, um, I just started actually three days ago. Um, but that is called Michelle RV, uh, Michelle Bousan's RV Park and Campground discussions. um where we actually really talk about the real stuff that happens in campgrounds and how to work with them, how that you know how to overcome them, how to get into your own campground. Um and then michelbby.com and if you want to find out about our campgrounds, you can find them on wayhaven.com. Haven, where we like you to experience the outdoors your own way.
Awesome. Well, thank you so much. I've enjoyed this. If you can't tell, I got