RV Park Investing: High Cashflow, Low Competition Strategy

Zander Kempf (00:00)
This RV park world where that hasn’t happened yet. The national average for RV parks is 8.7%.

Self storage and mobile home is down in the five and a half to 6 % range. So it’s high cap rate is 88 % of RV parks were owned by small mom and pops. So we see, okay, we have high cashflow. have all the opportunity to come in and roll things up. have low competition. And so there’s opportunity there to just go and grab market share. have high cashflow so we can sit on it for as long as we want. And then if we’re right about institutional groups coming into the space, which there’s evidence that they’re starting to then.

Dylan Silver (00:35)
Yeah.

Zander Kempf (00:36)
we can kind of ride that wave up as cap rates compress.

Dylan Silver (02:12)
Hey folks, welcome back to the show. Today’s guest is actually based out of Hawaii, beautiful Hawaii. And his company, Clear Summit Investments, focuses on RV parks and glamping with in-house management, vertically integrated. Please welcome Zander Kempf. Zander, welcome to the show.

Zander Kempf (02:33)
Thanks so much for having me, I really appreciate it.

Dylan Silver (02:36)
Absolutely, man. I always like to start off at the top by asking folks how they got into the real estate space.

Zander Kempf (02:44)
Yeah, absolutely. So I started about eight years ago when I was in, I used to be in the military. I was an officer and a paratrooper. And back then I was just looking for an alternative investment. So I was doing stock market and trading options and that was back in 2017. Bitcoin was starting to be a thing. playing around with crypto. And so I started looking in the real estate space just simply for a passive investment. found a single family turnkey.

house in Oklahoma city. was a $45,000 house for a 9K down payment. And the rent was like 300 bucks a month. ⁓ but that was my first house and I, I saw the power that real estate had for passive income for leverage. And I just went all in after that. did as much self-education as I could. I read every book. I, I dove into bigger pockets, listened to podcasts. I did some online courses and I started buying.

more and more was doing started off with like minor rehab. So something where we just needed to like replace a roof and fix up a kitchen. And then got into flipping and started flipping houses. But I didn’t love the flipping so much because we wanted to build passive income. And yeah, and these were hard to find. So, okay, well, I’ll take that same flipping mentality and let’s put it towards multifamily. And I went in the area that I grew up in, in New Hampshire, and we started finding

Dylan Silver (03:55)
Difficult, yeah.

Zander Kempf (04:10)
distressed small multifamily and doing the burr strategy where we’d fix it up, put in tenants, do a cash out refinance and roll all the money to the next one. And ⁓ did that over and over. got 23 multifamily buildings. And then that strategy kind of tapped out. So I started to move into development. And then at the same time I was getting out of the military, moved out to Hawaii to work for a large real estate developer as a project manager.

And on my own, was, I guess with them was doing large commercial development. So we did hotel, high rise, industrial subdivision, retail centers, anything on in the Hawaiian islands. And then on my own, I was doing multifamily conversions and some ground up construction and a little bit of land development. ⁓ And, you know, continue scaling all of that until eventually branched off from that development company back kind of the early years of COVID.

And we did a pivot to, we kind of looked at all the different asset classes and found a lot of opportunity in the RV and glamping space. So liquidated the multifamily portfolio, built a whole company in property management and construction management, everything around ⁓ buying and managing RV and glamping resorts. And that’s what we do now.

Dylan Silver (06:16)
I think the glamping, the

RVs, I’m a big fan. I haven’t done a deal in this space myself. My experience has been in wholesale and working with investors and distressed properties. But the RV space, I’m a big fan of any type of land plays like this. And I think you may see it from a similar but also different angle. And you were clearly convicted because ⁓ to go and liquidate the multifamily, you must have said, this is it. I know that this is what I’m basically betting the house on, so to speak.

Was there something in particular about the RV park space where you said, hey, I really, really like what this opportunity presents? Or was it a kind of a progressive over time where you said, you know what, this is what I’m going to go all in

Zander Kempf (06:59)
Yeah, so there’s a couple pieces to it. First was the opportunity in the market where, you know, I’d really liked, I’d done a lot of land development work and industrial. So I liked that clean cut for self storage and mobile home and that sort of thing. But both of those industries had gone through this big roll up over the last 10 or 15 years where they were very decentralized and owned by small mom and pops. And the cap rates were really high.

And then institutional groups came in and rolled all of them up. And then they became a very competitive asset class and cap rates got very compressed and prices skyrocketed. Excuse me. ⁓ so it didn’t really make sense to jump in cause I don’t want to be in areas where there’s a lot of competition, but what we saw was, okay, well that just happened there. But adjacent to that is

Dylan Silver (07:42)
Right.

Zander Kempf (07:46)
This RV park world where that hasn’t happened yet. The national average for RV parks is 8.7%.

Self storage and mobile home is down in the five and a half to 6 % range. So it’s high cap rate is 88 % of RV parks were owned by small mom and pops. So we see, okay, we have high cashflow. have all the opportunity to come in and roll things up. have low competition. And so there’s opportunity there to just go and grab market share. have high cashflow so we can sit on it for as long as we want. And then if we’re right about institutional groups coming into the space, which there’s evidence that they’re starting to then.

Dylan Silver (08:21)
Yeah.

Zander Kempf (08:22)
we can kind of ride that wave up as cap rates compress.

The other factor in this was, you I started the company eight years ago. I named it Clear Summit Investments because my whole time growing up and my whole life, I’ve always had all my fulfillment from nature and adventure and being outside. And my desire for building a company wasn’t just to get a billion dollars and be rich and whatever it was to enable a lifestyle of freedom to be able to go.

Dylan Silver (08:50)
Yeah.

Zander Kempf (08:51)
travel the world and do things like climb mountains, which is something I love to do. So I named the company Clear Summit because of that. And luckily this asset class that we found aligns exactly with that passion of these are really beautiful outdoor properties that are near lakes, rivers, the Grand Canyon, Zion, hot springs, and they let people get outside. You’re glamping, you have a fire pit and you have a sauna by a river.

gives people these amazing experiences and it’s like so much pride of owning these assets and to improve them ⁓ and letting our investors stay at the properties so you can use the thing you’re investing in. So there was the passion and like the lifestyle alignment as well as the strong market opportunity.

Dylan Silver (09:36)
I’ve noticed with the RV parks and in general people who like the whole space with RVs that there’s a lot of that. That there’s a lot of people who love the idea of being outdoors but also would like to have maybe some more amenities that are above camping, right? So which goes to the glamping portion of it. And I’m curious what a flip looks like in the RV park space. So I’m imagining and correct me if I’m wrong Zander, but

you’re finding these mom and pop RV park owners and they’re not necessarily always going to have, you know, facilities and glamping. It might be a space near a national park or so on and so forth. And then you have to do some level of rehab and, or, you know, force appreciate in some way. I’m wondering what that looks like because I’m completely unfamiliar with how that would work with the RV park space.

Zander Kempf (11:05)
Yeah, absolutely. So kind of our bread and butter is finding one of these resorts that’s in a great location. So, ⁓ you know, we want to be as close as possible to the national park or on a riverfront or on a lake that’s in like a popular vacation destination. And we want a property that’s big enough where we can put in our systems and our tech. Usually that’s like a $4 million minimum purchase price. ⁓ that’s enough where we can have like onsite management and have our systems kind of work.

⁓ And most often we’re buying from individuals that are just not professional owners. It’s a mom and pop operation that maybe they’ve owned it for the last 30 years. They make enough money, they don’t have any debt on it. They don’t need to go maximize. They don’t need to go expand on that 20 acres of land that’s waterfront right next to them because they don’t care or have the money or capacity to do that. ⁓ Or maybe they don’t really know how to properly market. Maybe they’re not on Airbnb and they don’t have a website.

Dylan Silver (11:59)
Yeah.

Zander Kempf (12:05)
And it kind of sounds crazy to us because it’s like, it seems like common sense, but I have two properties under contract right now that are exactly that. So these are kind of the kind of, call them like the no brainer, like the easy value add things of, okay, we know for sure that if we buy this property that’s not on Airbnb and we come in and we put it on Airbnb, we can make more money. And then on top of that, we put in all of our tech and marketing and systems.

Dylan Silver (12:26)
Yeah.

Zander Kempf (12:31)
We do influencer marketing and SEO and paid ads and all that stuff to really boost things. ⁓ And then physically on site, it’s bringing in these like health and wellness amenities. So we look at a property that’s in a great area, but maybe it’s underutilized because it’s not that exciting or it’s a little dated and we can come in and make it cool and vibey and put in string lights and saunas and ice baths and hot tubs and outdoor fire pits. Maybe there’s dog parks and a communal kitchen and bring in Starlink for

Dylan Silver (12:55)
you

Zander Kempf (13:01)
for high speed wifi. And now all of sudden you have this really cool like vibey park, really nice amenities that are like, let you go be healthy and feel good. And then you’re in a great area and that gives us higher occupancy and higher nightly rates. And then we’re off to the races.

Dylan Silver (13:05)
Yeah.

I’m curious, I know you do the vertical integration in-house management. You went that route, did you ever think about, I’m gonna rehab it, let me flip these RV parks, and there’s so many RV parks that are in this situation. I know that that can seem tempting. Did you ever think about going that route versus the vertical integration?

Zander Kempf (13:38)
It’s certainly something we look at. Excuse me. It’s something we look at and anytime we buy a property, we evaluate our exit options. So we always want to have multiple exit potentials. So we do look as okay, if we did flip it, what would that look like if we held it indefinitely? What does that look like if we held it for a year, if we did a minor rehab, a major rehab and kind of figure that out. ⁓ but what we’re actually doing kind of goes to our core strategy of the whole.

reason why we are in real estate in the first place is to create that long-term passive income that gives you freedom, financial freedom. So the fund that we put together, we’re rolling up 15 of these resorts and it’s called the real freedom fund, like real freedom from real estate. So investors come in, they invest in, they get monthly distributions from our resorts, and then we do a cash out refinance within the first five years that gives their capital back and then they own it forever and we can hold this portfolio and they…

Dylan Silver (14:11)
Yeah.

Zander Kempf (14:32)
keep getting monthly distributions in perpetuity. But that is our model is to buy these properties that we know we can improve and get more cashflow out of. They’re in great areas, so they’re solid and we can own them for the long term. And they have enough value add where we can do a cash out refinance and get all of our investors all their money back. But then we can keep owning it ideally forever and give everybody that long term passive income. So that’s our primary goal.

Dylan Silver (14:58)
I ⁓

want to ask you about raising capital and interfacing with investors. Is it a lot of private equity, a lot of hedge fund type of ⁓ funding, or is it a lot more of multiple investors, mom and pop type of people who may have a large nest egg and don’t want to handle the day to day of fixing and flipping themselves?

Zander Kempf (15:03)
you

Yeah, that’s a great question. And I think it depends on the individual or the company raising. So some people target family offices, institutional groups, RIAs. We target retail investors. So we are open to individuals. have accredited investors to meet the SEC requirements, but we have a $100,000 minimum.

And so long as people meet that, can come in with us. So we end up with mostly just individual investors.

Dylan Silver (16:37)
I think it’s an interesting space to be in. My hat goes off to you. I think it’s a lot to kind of take down. And so ⁓ the SEC accreditation, the vertical integration, first of all, finding the deals is not easy. Also, you’re involved in not just finding the deals, but then rehabbing the properties, finding the funding for that, and then the long-term management of it. It’s pretty impressive. I think any one of those verticals would have been a full business. ⁓

I’m curious to get, pivoting a bit here Zander, I’m curious to get your take on the outdoors world and kind of the sporting world. I don’t necessarily consider myself an outdoors guy, but I like to run. I previously liked to rock climb and do some jujitsu, so some athletics. have a favorite outdoors activity?

Zander Kempf (17:27)
Picking one is difficult because I love so many. a big like, I love being outside and adventuring and everything, but probably kiteboarding is my top one out here in Hawaii. It’s, it’s a pretty accessible, but I do a lot of surfing, free diving, big rock climber as well, ⁓ paraglide. And then in the winter back on the mainland, all skiing is kind of what I grew up doing and what I get a ton of enjoyment from. But really anything where I can like be outside in nature is just.

That’s what lights me up.

Dylan Silver (17:59)
What is kiteboarding?

Zander Kempf (18:02)
Kite boarding is where you have the kite flying. This is a big giant inflatable kite and it’s flying maybe like 30, 40 feet away from you on lines. Then you have a bar to control it and a harness around your waist. And then you wear either a surfboard or like a twin tip wakeboard type setup.

Dylan Silver (18:08)
huh.

Yeah, that is very, very cool. You know, one of the things that I’ve learned about these activities is I said, I broke my leg rock climbing. said, I really got to have good insurance for this. So I’ve since toned it back a little bit, but I love all of those activities. And man, think combining kind of the passion for the outdoors with real estate business, it’s just, my hat goes off to you. Congratulations on all the success. We are coming up on time here though, Zander. Where can folks go if…

they’d like to learn more about Clear Summit Investments or maybe they have an RV park deal that they would like you to take a look at or to reach out to you.

Zander Kempf (18:53)
Absolutely. Yeah, you can come to our website, clearsummitinvestments.com. You can also follow us on social or on the pretty active on LinkedIn. It’s Zander Kempf on LinkedIn. But either or would love to have an ⁓ interaction on LinkedIn or a property to sell or partner on. Feel free to reach out our phone number and emails on our website.

Dylan Silver (19:13)
Zander, thank you so much for coming on the show here today.

Zander Kempf (19:16)
Thanks so much, I appreciate it.