January & February 2009 Newsletter
Newsletter
This issue of the RVParkStore.com Newsletter includes:
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BUYING AN RV PARK? BEWARE OF COOKED BOOKSIT'S A RECIPE FOR DISASTER America is fascinated with shows about cooking. Chef schools have popped up in almost every major city. But there is one type of specialty cooking that is growing in popularity in all parts of America, and that's cooking the books on RV parks that are for sale. And unless you know what you are doing, your financial ruin is on the menu. What are "cooked books"? Basically, it's inaccurate revenue and expense numbers, generated by the seller. These numbers are normally relied on by the buyer, and their lender, to make decisions on the anticipated amount of income the park will generate and, accordingly, how much can be paid for it. When these numbers are wrong, all of the other numbers, such as purchase price and loan size, are wrong to. And the end result is that there is not enough money each month to pay the bills and the note payment. Why do sellers "cook their books"? That question is easy. Since real estate is normally sold based on a cap rate of income, and assuming that the cap rate is often 10%, then every $1 that they show of income is an extra $10 in their pocket. Basically, the key driver is greed. But often, the seller misrepresents things based on their own bad accounting practices, or even not thinking about the value of their own time. So cooking the books is not always deliberate - but the end effect is the same. The key areas of "cooking" include: � Incorrect numbers on revenue. It is rare for a seller not to overstate revenue. Since most RV parks work on a cash basis, it's easy to pretend that there is more income than there really is. And, if pressed for bank receipts, the seller will say he doesn't deposit all the cash - he spends it. And to cover his trail, he will also tell you that he cheats on his income tax (it's a good thing the IRS doesn't buy RV parks) and does not report all the cash on his tax return, either. And then to really make matters tough, he has no formalized accounting system at all, he just takes in cash and spends cash, so it is impossible to attempt to build a paper trail. � Not telling you the truth about repair and maintenance. Many RV parks have substantial problems in their water and sewer systems, but hide that fact by "capitalizing" the repairs and not showing them on their income and expense statement. They put them on their balance sheet as a capital investment, and then you never see the balance sheet (they know that, that's why they do that). You think you have a well-running system, and in fact you have the plumber out on day one. � Misleading you on the amount of time, and cost, of managing the property. They will tell you that they only spend a few hours a day, when in fact it's eight hours. And they leave out their staff of three family members that they pay under the table. And forget about revealing the cost of mowing the park, because they do that themselves. These numbers can lead up to many thousands of dollars per year. � Property Tax. Don't ever let the seller tell you that the property tax will remain unchanged after the sale. You must use 100% of the tax due based on an appraised value of the park at the price you are paying for it. Period. If the tax rolls show the park at $100,000, and you are paying $400,000, then you must calculate 400% of the existing tax amount. I don't care if it is a non-disclosure state (states that do not require you to give them the exact purchase price amount), they will ultimately find you and raise it. And by then, the seller, and his assurances, are long gone. So how do you protect yourself? We urge you to buy our book Thirty Days of Due Diligence, which tells you every step to take every day of your standard 30 day due diligence period. It is inexpensive and just may save your financial life. And if you decide to go it alone, by all means, check out every possible number on that income and expense statement to validate it. Go to the source on utility bills. Talk to the existing plumber on repairs. And ask to see the real revenue for at least the time that you have the park under contract. Will using the real numbers tank your deal? Possibly, but would you rather have a park that sinks you in hand, than looking for another opportunity in the bush? Eating people's cooking is one thing, but buying their book cooking is another. One tastes good, and one leaves a terrible taste in your mouth - and your wallet. |
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Would you like to make an extra $100 per week at your RV park, and make your customers happy at the same time? Now you can, with one of our "$20 Old Tyme Photo" systems. You can provide your guests high-quality old tyme photos, in historical outfits tied to your local attractions, using green-screen technology, for the incredibly low price of $20, which is about 66% less than normal old tyme photo studios. So they're happy. And you have margins of about 85%, so you pocket $17 after expenses. Only one per day would give you over $100 per week in additional income. The cost for the turn-key system, including all equipment, costumes and three-day training at our facility near St. Louis, Missouri, costs under $10,000. If you are interested, call me at (573) 535-0206. I look forward to hearing from you. Sincerely, Frank Rolfe RV Parkstore.com |
| RV Parks and Campgrounds For SaleWe currently have over 500 RV Parks for sale and the list is growing daily. If you are looking to sell your RV Park or Campground you can do so Risk FREE. Find out more about Selling your RV Park. |
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Dave and Terri Hi, want to say thanks. Being able to put our park on your site helped sell it. You have a great site. I will recommend your site. Please remove the RV Park. ThanksDan Pirello |
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Featured Listings: RV Park For Sale in South Dakota 50 acres 2 nice houses 255 RV site 6 cabins & tent camping for 600 people or more Find out more about this RV Park For Sale Opportunity! RV Park For Sale In New YorkLocated in Oneonta, NY just off I-88 exit 13 we are only 1.5 mile off the exit. Find out more about this RV Park For Sale Opportunity! |
| Diane,
We recently sold out RV Lot and our Thousand Trails membership as a result of the ads placed on RVParkStore.com. Interestingly, we were first contacted by our buyers over a year ago. Enclosed is a check for $100 for our listings. Thanks for providing a great web site! Don and Kathy RV Park and Campground Memberships For Sale: This section of RVParkStore.com is growing quickly. Memberships are being listed and sold quickly. With about 200 memberships currently for sale, this continues to be the prime outlet to buy and sell campground memberships. Best of all, when you are selling your membership, we do not charge you up front to do so. You only pay us if you are successful in finding a buyer from RVParkStore.com. Find out more about Selling your Campground or RV Park Membership |
| RV Park Employment Listings:
Are you searching for good quality employees or looking for a position with an RV Park? Then be sure to visit our ever growing employment listing sections. All listings in these sections are FREE! Check out the Help Wanted Section |
| Here are some links to articles we have found this month.RV Parks an economic bright spot Read More Economy not slowing RV enthusiasts' traveling Interesting Article |
| Tell us what you think! We'd love to hear what you think of this issue! We need your articles - send your articles to dave@rvparkstore.com to be included in upcoming newsletters (this is a great place to promote your company for FREE!). Please send your comments, questions, articles, and ideas for upcoming issues to us at: dave@rvparkstore.com Your feedback matters to us! |
| Until Next Time,Dave Reynolds RVParkStore.com 18923 Highway 65 Cedaredge, CO 81413 PH: 800-950-1364 FX: 970-856-4883 |