-
What about buying in the current economy?
Top...
Sometimes you will have more leverage
with a Seller (as with homes, currently).
-
What about financing during the current
economy?
Top...
I’ve never been unable to finance a
campground; even during the downturns.
And...rates are still low!
-
How much do I need for a Down Payment?
Top...
Banks generally have been requiring about
25% of the Selling Price. Owner financing
sometimes requires more as that is all
that the Owner is going to receive for
money at the Closing. Seller will need
money for expenses such as paying off any
mortgage that he may have along with
Closing Costs including legal fees, real
estate transfer taxes, real estate
commission and capital gains taxes. As
most Buyers are from out of state, we
usually locate bank financing for the
Buyer. We do not charge a fee for this
service nor do we receive one from the
lending institution
-
Where do I get financing to purchase a
campground?
Top...
Typically, in New England - usually
either with bank financing or owner
financing.
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What kind of financing can I get?
Top...
Banks in this area will usually finance
for up to 20 years. Until very recently
they have given only variable rate loans
(with or without caps). Some banks are
now offering 2, 3 and 5 year fixed rates.
Banks will usually lend in the range of 1
point to 2.5 points over prime depending
on bank, income of the business being
purchased and Buyer's experience and
credit history. Some banks will now
consider loaning additional funds for
property improvements particularly if the
improvements may help increase income
(pool, rec hall, swimming pond, etc).
(Perhaps 80 - 90 % of our sales have
involved bank financing.)
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How do I go about getting bank financing?
Top...
The Broker usually does it for you.
-
What does "Owner Financing" mean?
Top...
Owner financing means that the Seller
become the bank. Instead of a bank
loaning you the money, the Seller does.
You give the Seller a Mortgage and a Note
to secure the loan. Usually it is on the
property being sold. The terms of
financing can be:
- for any length of time,
- at a variable or fixed rate of
interest,
- can have a balloon payment.
Payments are usually monthly,
sometimes annually. There may also a
"penalty for prepayment" clause or a "no
penalty for prepayment clause". The Note
will contain other standard clauses, as
well.
What "Owner Financing"
DOES NOT
MEAN: That a campground can be
purchased with No Money Down and the
Owner will finance 100% of the Selling
Price.
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Should I build my own campground?
Top...
Almost nobody builds campgrounds, anymore
in this part of the country. It probably
costs at least twice as much to build a
new campground as buying an existing one
which would have an immediate Cash Flow
versus waiting 3 - 5 years just to break
even. If you don't have enough money to
purchase an existing campground, the odds
are very strong that you cannot afford to
build one. Possible exceptions:
Developers, land owners, someone with,
say, $500,000 in cash or Line of Credit
from a bank.
-
What kind of living quarters do they
have?
Top...
It depends. Each campground is different.
A campground may contain no living
quarters, a camper or park model,
apartment, cottage, mobile home, small
house or large house.
Broker Note:
The primary purchase is a campground,
and, within reason, the living quarters
should be secondary as they can usually
be changed. It is possible for a Buyer to
select a campground with much less
potential for business development then
others that they have looked at because
of the former has higher quality living
quarters.
-
Are campgrounds complicated to operate?
Top...
For most people, the answer is "no". In
fact, along with the "lifestyle" that
owning and operating a campground offers,
operations, are for the most part quite
simple and "common sense" goes as long
way. The three basics that will take you
a long way in the campground business
are:
- Clean restrooms and, in general, a
clean, neat and attractive property. An
inviting entrance, a few flowers, a
"Welcome" sign or two is helpful.
- Almost everybody who comes camping
is there to have a "good time". (That's
also one of the attractions of owning a
campground - people are there to relax
and have fun and reduce the stress that
most have had all week in their working
environment.)
- Keep the children happy and the
parents will be happy.
Generally, Sellers will stay and train
the new Buyers by familiarizing them with
basic operations. Normal period of time
is one or two weeks, depending on the
size of the campground, time of years,
experience of the Buyer, etc.
If you can't help them have a good
time... don't help them have a bad time!
-
What skills are neccessary in running a
campground?
Top...
Skills required for running a campground
are simple everyday skills, there are
really no special skills requires, but
there are some helpful skills:
Handyman skills are good skills to have;
to be able to fix a toilet, broken PVC
water pipe, repair an onsite electrical
box, fix a lawn mower or, perhaps a
washing machine. (If you don't have these
skills, send out for a repairman.)
Answering the phone and taking
reservations and/or selling penny candy.
Advertise your campground. There are only
a few camping industry organizations to
join, and camping directories to
advertise in along with doing a camping
show or two.
-
Can I make any money with a campground?
Top...
Like most anything else in life, you
usually get out of it what you put in to
it.
Some Owners just plod along and at the
end of the year compare their income to
the that of the previous year.
Some put just a little more effort in and
generally do better and do it sooner.
Some do a Business Plan, either written
or in their heads, set financial goals,
establish procedures to obtain them,
review accomplishments at end of season
and revise plans as needed. These are the
folks who generally do the most and the
quickest.
Then there's the old, antisocial grouch,
whose campground you've all stayed at;
and even he is doing "pretty good" in
spite of himself.
CAMPGROUNDS, AS BUSINESSES, ARE QUITE
BULLETPROOF.
Unlike a restaurant or some other
businesses, it's very difficult to run a
campground "into the ground".
-
Where can I get help running a
campground?
Top...
Usually a Seller will stay on for one or
two weeks to train you in the general
operating procedures of the campground.
In addition, the Executive Director of
the state campground association will
spend several hours with you. State
associations usually have one or two
statewide meetings per year during which
several seminars on different aspects of
the camping industry are presented. The
are also multi-state camping association
and national association conferences held
during the year.
Brokers who specialize in campgroungs,
like myself, plus present and former
campground owners also conduct seminars
and do consulting on a one-to-one basis.
Neighboring campgrounds will also help
you and refer their overfow to you.
Campground owners, by and large are a
friendly and helpful group. In some areas
the local campground owners go out for
coffee several mornings a week. They also
often share equipment with one another.
-
When is the best time of year to buy a
campground?
Top...
For most Buyers, the Spring is the time
of choice, preferably a couple of weeks
to a month before the camping season
begins. In the northeast the average
opening date is around the First of May.
Some sooner - some later.
Except for Memorial Day Weekend, a Buyer
would not lose much transient business
until Fourth of July week. Seasonal
rental monies are usually prorated at
Closing.
Often Autumn is also a good time to
purchase for som buyers as long as
mortgage payments can be structured so
that they are managable through the
winter months when the cash flow often
shrinks.
An Autumn sale allows a new Owner to
become somewhat familiar with the
property and a chance to impact next
year's income by:
- Designing new brochures.
- Exhibiting in one or more camping
shows (you'll learn a lot just from the
other campground owners who are also
exhibiting). You will also be able to
talk intelligently about your
campground as you will have owned it
for several months.
- Planning for new activities and
improvements
- Increase advertising
- Raise rates, if appropriate.
Broker Note: I
have sold campgrounds in every month of
the year. The benefits of purchasing in
the Fall vs. waiting until the following
Spring is of such significance that I do
an entire 2 hour seminar on this concept
-
What about buying in the current economy?
Top...
Sometimes you will have more leverage
with a Seller (as with homes, currently).
-
What about financing during the current
economy?
Top...
I’ve never been unable to finance a
campground; even during the downturns.
And...rates are still low!
-
Does Dunton Commercial Properties
co-broke transactions?
Top...
No. Due to the nature
and complexities of selling campground/RV
parks, Dunton Commercial Properties is
unable to co-broke, however, Dunton
Commercial Properties may offer a
referral fee only when cooperating broker
has made appropriate arrangements with
this office prior to any involvement in
transaction
