Books can be written on this topic, and they have, so this isn’t being written to become your be-all end-all, but instead will just add to your considerations and brainstorms. When it comes to how you deal with buying or selling an RV park, no 2 successful sales are alike. Each one depends on a multitude of factors. (So as you read my blog, keep in mind that your situation may or may not include all I’m outlining, and it may include many other nuances I am not addressing here.)
When we were looking to buy a campground we began preparing to sell our yet-to-be-purchased campground. In other words, during our review of nearly 100 RV parks on the market, we saw what others were providing to us. We looked at the condition of the facilities. We drove long distances only to see obvious details they’d been hiding from us. We witnessed aggressiveness, pettiness, rudeness, and ignorance. In general, we realized others were doing unto us what we chose to not do unto our buyers.
Yes, even before buying a campground, we were collecting ideas for what we would want to see if we were in the buyer’s shoes when we were ready to sell.
First of all, we saw many RV parks in need of serious repair or improvement, so we prayed we would try to sell long before we hit burn-out. Better to sell it before we began to burn out & watch it go downhill.
Secondly, we saw incomplete books. “Oh, we bring in a lot more than we report to the IRS!” Not us. Good books. Accurate and thorough ones. Not just for resale purposes, but primarily for our ability to better manage the place!
Last year I sat on a panel discussing the process of selling campgrounds. This was done through the National Association of RV Parks and Campgrounds (ARVC), and the attendees heard me talk about lots of “lists.” I felt like I was dumping my brain and my computer into massive lists! Yes, there were lists but I should have said “records” more than “lists” because the format of the material varied.
One list is that of the equipment. To say, “All that stuff in the garage stays with the park,” can, sadly, translate to, “All that stuff except for what I find buyers for before we go to closing.” If it isn’t an itemized list, the items you see this evening at their park may not be there tomorrow when it’s your park. List it!
But more information is needed for you to truly slide in as the new owner without serious hiccups. As for that equipment list, what about the age of each item? How about the history of each piece?
How long ago was the furnace installed? Who installed it? How about any maintenance history? Ditto for the endless list of other appliances. While we’re at it, include details on the golf carts, mowers, hot tubs, pool equipment, and so on.
Obviously, P&L and other financial records are vital (especially accurate ones!).
Other assets that you don’t necessarily see need to be not only be mentioned in a contract, but itemized for clarity: domain name(s), website(s), social media pages, telephone number(s), PO box, and so forth..
Now, you don’t want to keep their merchant account, but you might like to keep (and reprogram) their merchant card reader.
Why don’t you want to keep the account? Because you are most likely buying the business but not the legal entity. I sold my real estate, specific personal property, and the client base, but I retained my corporate structure, my tax liability, and so forth. The same goes for the web hosting account, the telephone account, your vendor accounts, and any other financial connection. All of these are tied to your business tax identification or liability. Unless legal or financial professionals convince you otherwise, it’s my understanding the buyer doesn’t want to inherit these from the seller! The seller will want to close accounts, while the buyer wants to open new ones. The buyer and seller are merely passing the physical or virtual property, not the accounts themselves.
The retail inventory shouldn’t be overlooked, especially if you have a fairly large selection.
As closing comes near, a buyer will need to know where you have active advertisement listings still running, and their respective residual values.
How about billboards? And their respective land leases or agreements?
What about easements to your property, or your easements on someone else’s property (I had access to the billboards I owned which were located on property belonging to others).
How about a vendors list? Additionally, which items do I buy from which vendors. If a buyer isn’t from the area, just seeing a list of names doesn’t help them understand which vendor is used for which services and supplies. On this list, include anyone who helps your business operate, including utility companies.
Another list (or sub-list to the vendor list) to consider is your professional affiliations. The buyer can decide whether to join, but having the current list from the seller gives the buyer a starting point, especially if they are newcomers to the industry. The list shouldn’t be just a listing. Provide some of the reasons for affiliating, the dues or fees structure, and the contact information (or refer to them to an online resource for such details).
It was also important in my situation to provide details relating to the community, tourism, and culture. If you’re fortunate enough to be selling in a widely-known area, this might not be so important, but few people knew much at all about my rural setting.
Future reservations and their applicable deposits must be outlined. Initially, it’s fine to simply declare that there are reservations on the books for next camping season, but by the time you all sit at the banker’s table to close the deal, very detailed specifics must be outlined.
I provided copies of all my permits, licenses, certifications (accuracy of the propane meter), legal agreements (easements, leases, etc.), print ads, and warranties.
I also provided aerial images and the legal property descriptions. The internet is a fantastic addition to the world of buying and selling (I wish it had been as widely developed back when we were buyers!).
You also might outline the training you are willing to provide to the buyer. This may not require an actual list, but might instead be a discussion. Prepare yourself for the training areas you feel are most important. I provided some of my training via instructional sheets. I could then walk through the process with them, and leave them with not only my phone number but also the ‘cheat sheet’ for when they do the task after the training has ended.
These next ones were taken from a purchase contract, so be prepared to see these on the list of items you’ll need to provide:
- Three (3) years of all business records in any form, including but not limited to databases, general ledgers, spreadsheets, occupancy statistics, etc.
- All camper registration receipts (including customer names, addresses, telephone numbers), and financial documents back three (3) years, with any waiting list for future campers.
- A statement of the name or names under which the business has been conducted over the past five (5) years, a statement of the form of entity under which the business has been conducted, and a statement of the names and addresses of the owners.
- Engineering drawings, building schematic plans, survey of property and building, utility schematics, drinking and waste water treatment history documents, and any other documents relating to management, operations, maintenance, or expansion of the business.
The ‘lists’ or ‘records’ seem endless, but let me take you back to something that was very clear to us when we were buying. When it’s time to sell, I recommend you do unto others as you would have wanted done unto you.
I thoroughly enjoyed my decade as a park owner. Sure, I had days I would have sold the place for the first penny handed to me! During the time in which I owned & operated my RV park I experienced both the best and the worst that life has to offer. But seriously, every night I went to sleep (very quickly from exhaustion) knowing I loved serving others and I loved doing what God had given me the privilege to do!
Thank you for sharing your time with me! Please feel free to leave comments, or share or ‘like’ this with your connections.