I recently came across an RV park for sale by owner, in Southern Arizona.  This park has a lot of potential and I believe it could be purchased at a good price, and with seller financing terms.  In fact, I’ve been thinking about purchasing this RV park myself.  Nevertheless, I decided to write about this and share about this great opportunity with keen investors, here at cashkeen.com

Are RV Parks in Arizona a Good Investment?

Generally, RV Parks offer high Return on Investment (ROI) compared to most other investment forms. Most commercial real estate investors that focus on RV parks are cash flow investors. Successful RV park investors earn cash flow of thousands of dollars per month. Talk about financial freedom!

Investing in RV Parks in Arizona has one big advantage over investing in many other parts of the country. You guessed snowbird travelers! Nevertheless, each RV park is unique and must be evaluated carefully. Let’s take a look at this park to see if this one has the possibility of being a good investment.

• Finding RV Parks for Sale by Owner in Az
• Owner’s Original asking Price
• Number of RV lots
• For Sale by Owner and Owner Financing
• Park’s Potential
  • Raising RV Spaces Rates
  • Increasing Occupancy
  • Potential for other park improvements
  • Located Across an Interesting Property – Golf Course
  • An Improving RV Market
• Evaluating this Investment Opportunity
• How to Contact Seller
• How to Find RV Campgrounds for Sale by Owner

Finding RV Parks for Sale by Owner in Az

One common way of finding RV Parks for sale is by looking in websites such as loopnet.com. However, the best deals are found by paying attention to the RV parks themselves, as you visit different parts of the country.

If you read my most recent article, you already know that I’ve been traveling to the Southwest region, of the United States.  And that as I travel, I always look for opportunities to invest in mobile home parks and RV parks.

In fact, the recent article mentioned above, an Amazing Story of RV Living – Making Money – RV Park Investing, is about an Arizona retiree that bought the RV park he was living in.

With this strategy this keen investor is experiencing true financial freedom. Financial freedom is about cash flow, and he has plenty of it.

As it turns out, the RV Park for Sale by Owner featured in this article and the one I recently wrote about are both in the same area, in Southern Arizona.  The weather in this area is very pleasant, which attracts retirees and travelers.   In addition, the park’s proximity to the US – Mexico border can also be a positive. 

The park for sale had a small and faded ‘For Sale’ sign right at the entrance of the park.  In fact, I wrote the number down, but was sure I would end up getting a disconnected number or something along those lines.  My initial instinct was wrong.  Someone did answer the phone. 

Owner’s Original asking Price

I introduced myself and explained that I am a mobile home park owner, which is something that helps me connect with other owners.  After a few formalities he gave me his asking price, without hesitation – $700,000.  My first impression was that this wasn’t a bargain price, but the park deserved further evaluation. 

$700K may sound like a lot of money, but realize that this is just a starting asking price. And realize that to purchase real estate assets you typically need a down payment of less than 30% of the asking price. In addition, realize the option of owner financing opens many other opportunities.

If you are in a hurry, and want to get to the evaluation part, please click on the Evaluate This Deal Forum link. Here I provide a rough evaluation of this RV park.

The owner agreed to email me Profit and Loss (P&L) statements, which I eagerly awaited for.  I did get an email from the owner, but when I looked at it on my phone, the P&Ls were very confusing.  Well, it turns out I was looking at a spreadsheet with multiple tabs.  I should have looked a this on a computer rather than on a phone. 

At about that time I was also considering purchasing a house to flip.  All of these things contributed to me becoming a little less interested in buying this RV Park. 

In fact, months went by before I contacted the owner again.  But this time, we met in person.

Number of RV lots

The owner shared the park is permitted for over 100 spaces.  However, I estimate the highest occupancy I noticed during my visits was about 60 spaces.  And this occupancy was higher than normal due to additional demand due to some construction work nearby. 

Also it is important to note that this RV park is located across from a golf course that went out of business.  Naturally, having a golf course across an RV park can be good for demand.  But, since the golf course closed, that benefit isn’t there anymore and occupancy would need to be evaluated accordingly. 

For Sale by Owner and Owner Financing

Often, RV parks can be bought through owner financing.  That’s because finding bank financing for such properties can be difficult.  Owner financing is really only possible when the owner either owns the park outright, or has substantial equity in the park. 

There are numerous advantages to purchasing a park with owner financing.  Perhaps the biggest advantage is not having to deal with a bank.  In addition, owner financing allows for a degree of flexibility. 

Such flexibility may include lower down payment amounts, lower interest rates, longer terms, balloon payments, etc.  All of which can help both buyer and seller reach win-win deals. 

In my case, I am always looking at improving my cash on cash return.  I want to put down as little money out of pocket as possible, so I can buy more properties.  One way in which I’ve been able to do this is by getting money from a bank lender and getting some financing from the seller. 

If nothing else, owner financing opens the door for creative ways to purchase a property. In an article titled “How I Bought a Mobile Home Community with $36,000” I discuss how I combined seller financing with bank financing to purchase a mobile home park.

Obviously, the less money out of pocket you are on a deal, the higher the cash on cash return, provided the deal is still cash flow positive. 

Park’s Potential

Raising RV Space Rates

The RV park’s owner used to charge $300 per lot, but a contractor talked him into getting a discount to house a bunch of workers.  The owner agreed to charge only $250.  And he ended up extending this discounted price to all the residents in the park. 

Obviously, a new owner could reinstate the $300 monthly rate.  More research work would have to be done, but I believe even a rate of $300 is too low. 

Increasing Occupancy

Looking at aerial images in Google Earth and using the historical image feature, I was able to get an idea of the park’s occupancy in prior years.  My conclusion is that the park has maintained an average of 35 spaces occupied, in the last few years.

By looking at the first three aerial images, it easy to conclude the golf park was active through May of 2019. But, even then occupancy wasn’t great. And the last image appears to show an aerial when the golf course was close down. I counted about 31 occupied spaces.

The first thing to address is this RV park’s underwhelming occupancy.  The park is permitted for over 100 spaces, yet it appears on average only about 35 to 40 or the lots are occupied.  If you read the article I referenced at the beginning, you know the other park mentioned in that article is 100% occupied. In addition, many of those residents are long term residents.  And these two parks are in the same geographical area. 

When I asked the RV park owner if he was advertising, he simply said I have a website.  So, it appears with some effort a new owner could increase occupancy. 

I believe there are some limitations in terms of overall space.  It seems to me that at around 70 occupied spaces the park would feel a little crowded. 

Potential for Park Improvements (for Higher Occupancy and Rates)

The RV park would sell with an adjacent vacant lot – shown in red above.  This lot is currently not being utilized.  If I were the owner of the park, I would be looking into creating a nice space, by adding plants, benches, etc.  In addition, I would certainly look into the possibility of adding a pool and/or a hot tub to enjoy the beautiful Arizona starry nights. 

The park also has a club house that is not being utilized.  I believe the park residents would enjoy having a place to hang out.  From what I’ve seen, many retirees are looking for community and would welcome a place to hang out with their friends.  All of which could very well lead to acquiring long term residents.

Located Across an Interesting Property – Golf Course

The golf course across presents an interesting situation.  One, in which certain investors may see an opportunity. 

During my discussions with the RV park owner I learned that the owner of the golf course had plans for the property that did not involve a golf course.  He either wanted to develop the property or wanted to sell it. 

However, as I am told, the golf course owner has been fighting a legal battle over a clause that requires that piece of real estate to remain as a golf course.  And apparently, if this clause is violated, then this piece of real estate becomes the property of the city. An interested buyer would need to do all the necessary due diligence.

As of now, that beautiful piece of real estate sits there waiting for a resolution to this issue.  At some point something will give.  One possibility is that the golf course owner wins the legal battle and eventually that piece of real estate will be redeveloped.  Another possibility is that this land becomes city property (i.e. an open space or a park).  And yet another possibility, although probably unlikely, is that an investor buys the property and operates it as a golf course. 

In my opinion, either of these possibilities are an improvement from the current situation.   

An Improving RV Market

It should not come as a surprise that the COVID pandemic brought additional demand to the RV market.  More people are buying RVs now and consequently there should be more demand for RV spaces. 

In fact, precisely for this reason, the RV Park’s owner was already considering a higher asking price than what he had indicated to me during our first conversation. 

This article is a good read for those interested in the current RV market:  RV makers are seeing surging demand as stay-at-home orders lift and some companies are struggling to keep up.

In addition, it is hard to deny the demographic factor affecting this market.  Many baby boomers continue to gravitate to the RV space for obvious reasons.  More interestingly, many millennials are also gravitating to this space. 

Obviously, if demand for RVs increases, demand for RV park spaces will follow.  As a side note, I just learned that my retired neighbor recently sold his RV because he was having difficulty finding spaces for his RV, while traveling.

Evaluating this Investment Opportunity

At this point you may be wondering why I haven’t bought this park for myself.  There is one main reason for this.  As good as RV parks can be as investments, I still prefer mobile home parks. 

RV parks can provide higher returns (higher cash on cash returns), but they require more active management than mobile home parks.  And I am in a stage in life where I prefer the more passive investments. 

Having said that, if I lived within a few hours drive of an RV Park that had good potential, I would be much more inclined to buying it. 

Managing an RV park from afar can be very challenging and personally, I prefer to stick with a different business model. 

And because of this, I decided to instead share all the information I’ve gathered about this park with keen investors like you. 

Because I am also trying to promote the forum section of this website, I’ve decided to continue this evaluation in the Evaluate This Deal Forum. Here I provide a rough evaluation of this RV park.

How to Contact Seller

My last two articles, which both pertain to RV park opportunities, have several similarities.  They are both owned by retired boomers that live in their parks.  Both of them are making money while still enjoying the RV lifestyle.  However, one of this retirees is ready to be done with this adventure, thus allowing me to bring this Arizona RV park for sale by owner to you. 

If you are interested in this Arizona RV park for sale by owner, or want to connect to discuss similar opportunities, please click here to contact me.  When you do so, I’ll provide you with the contact information for this park owner and you can contact him directly. 

How to Find RV Campgrounds for Sale by Owner

Based on the amount of traffic to this post I realize there are a lot of potential buyers looking for campgrounds for sale by owner. My best recommendation is to talk to as many RV campground owners as you can, talk to the managers and to the residents. In addition, I would recommend developing relationships with the local brokers and brokers specializing in RV campgrounds, mobile home parks, and other commercial real estate.

Finally, there are a few online sources to look for campgrounds for sale. You may not find a for sale by owner right away, but this can be negotiated. One of the websites I like for this purpose is Loopnet.com. The tricky part is that Loopnet’s search form doesn’t have a specific category for campgrounds. As such, you’ll have to play with a few different searching criteria. For the most part, you’ll find campgrounds and RV parks under the categories “other retail” and “manufacturing housing/mobile home parks.” In addition, I would use various keywords such as ‘RV’, ‘Parks’, ‘Campgrounds.’ See screenshots below.

Disclosure for this RV Campground For Sale in Arizona

Keep in mind I am not a financial advisor, a real estate professional, a broker, a lawyer, accountant, etc.  I am actually an engineer with a passion for business and real estate.  My desire is to help people in the area of personal finance gain financial knowledge. 

Please don’t take any of the information provided in this website as investment advice.  Rather, it is recommended you consult a professional prior to making any investment decisions. 

And by the way, I don’t intend to get a finder’s fee on this deal.  Instead, I am looking to connect with likeminded investors.