Transform Your Finances: Invest in RV Parks with Expert Tips

Dylan Silver (00:00.898)
Hey folks, welcome back to the show. I’m your host Dylan Silver and today on the show we have Andreas Pettersson. And Andreas is an RV park enthusiast and the CEO and founder of multiple companies. Andreas, welcome to the show.

Andreas Pettersson (00:19.161)
Thank so much for having me. I love to talk about real estate, so this will be fun.

Dylan Silver (00:23.232)
Absolutely, before we hopped on here, we were talking about different directions which we could go with the show and you mentioned just how much we could really talk about the RV park space.

Andreas Pettersson (00:36.249)
Absolutely. So I come from a background where I did both single family multifamily. I have my own real estate multifamily portfolio. But because of interest rates and I have the portfolio in California and the tenant laws are not always so fun. I was looking for alternative things to invest in in the commercial real estate space.

stumbled upon because I met another couple who was doing this, Jason and Erica. And they were absolutely telling me these crazy numbers that you could get as a return on as an investor. And I’m like, okay, I’m missing something here. Didn’t believe it. And now we started because of a joint venture with them. We’re raising capital, we got our first parking, we are having four more, we’re about to here start racing for now in Q2. And

Yeah, the returns are insane and I realize I can apply all my business knowledge to this. So yeah, I get a little, I can talk forever here. So I think you need to interrupt me and just ask the questions. Otherwise I will just keep going.

Dylan Silver (01:44.878)
Well, this is, always say I like to have a guest where there’s lots of interaction because it makes my job easier. But for folks who may be unaware, RV parks are considered commercial, is every RV park suitable towards someone who’s looking for a commercial investment? Or is it really a very niche space and you have to know lots about running an RV park?

Andreas Pettersson (02:09.207)
I love that question. The number one misconception I get is people think it’s a mobile park and it’s not a mobile home park. It is a destination. You go camping and you enjoy time with your family. And there’s often a destination in terms of a massive pool, hiking trails, nature. So that’s, that’s the first thing I wanted to say. The second thing is that

RV parks in general, like the skillset you need. Yes, it is a niche. It’s absolutely a niche, but there is an opportunity right now because many of these RV parks were bought, owned by boomers for 30 years and they want to retire and they don’t always know how to sell them. I see some people come in in this space, think it’s commercial real estate, think they can just get a park and put a traditional property manager on it.

and get results. Not the case. You need to know how to properly do marketing, do sales, local SEO, and really drive customer experience and customer engagement. It’s still a very hands off investment class because you still hire a park manager. But I would say for people who have run, been entrepreneurs, run multiple businesses and really understand how to position

and experience, they can absolutely get into this space. Absolutely.

Dylan Silver (03:40.982)
I’m thinking about maintenance. know nothing about RV parks, Andreas. I know nothing. And so my thing is, I these are some basic basic questions. There’s septic tanks, multiple areas throughout these sites, right?

Andreas Pettersson (03:54.819)
There are either septic tank systems or you’re connected to the sewer. But in the end of the day, the maintenance is cutting grass and making sure the gravel and the roads are okay. The asphalt is okay. There are some maintenance related to depending on where your park is, winter maintenance and so on. But overall, it’s a very hands off investment class. It’s not like

You have a building that have been standing there for 50 years. It’s in the end of the day, you have a pad, have hookups and electricity. So water hookups, sewer hookup and electricity. That’s pretty much it. And the cool thing is that you might have amenities. You might have other reasons why people are going that. The hardest part for me and getting into this space have been I’m all for like concentrated efforts yields concentrated results.

If you want results like laser focus RV, RV parks have typically five different value propositions and five different products in addition to the actual RV pads themselves. They often have pickable courts, pools, restaurants, water parks, all these other things around it. So you have some seasonality into it. But again, compared to buying other businesses or other type of real estate right now, the returns are.

far superior from what I have seen.

Dylan Silver (05:22.808)
So a misconception that I previously had before speaking with you, Andreas, that these were maybe longer term rentals or people living there, but it sounds like these are attractions that are short term and very little maintenance.

Andreas Pettersson (05:42.585)
They are the park. We, I’ll give you a small example. Now we just bought at one park. had 54 pads. are, we just are in the process of adding an additional 25. So 50 % more occupancy. This is on the smaller end of our buy box. So if anyone listens to this that are into RV parks or know our broker or are selling RV parks, like we’re typically looking for a hundred to 150 where we can do 50 % additional capacity on top of that. But yeah.

The parks, how do I say this? It’s absolutely an attraction. It’s absolutely a destination. Often there is a camp store. You need an ice machine. You need to throw some events. But in the end of the day, we’re asset managers. So we hire park managers and it’s their jobs to take care of all of this. We of course help them with the strategy, get it all in place, put up the right systems, the right automation, the right process. But after that…

It’s them that maintain it. And then we make sure the park manager is incentivized on keep driving up occupancy and selling a lot of more things in the park. example, making sure that we build back electricity properly or making sure that the ice cream is stocked in the camp store or whatever that is. So yeah, very, it’s like running a small little business. Now, with that said, we’re staying away all the deals we currently have.

that we’re currently negotiating. We’re staying away from restaurants, full service restaurants. If it’s just some burgers and fries, I’m all for it. Full restaurants, full sit down menu. We don’t want that.

Dylan Silver (07:24.094)
I wasn’t aware that this was almost on some level like a small town. And so there’s an element to that there. What percentage or roughly would you say of RV parks have all of this going on? You mentioned pickleball, you mentioned attractions, you mentioned food, right? Versus RV parks which are maybe situated in an area where there is an attraction but they’re not really providing.

attractions themselves, nor will they have food.

Andreas Pettersson (07:57.149)
I have met, based on the hundreds we have in our pipeline that we have been reviewing and underwriting, I would say almost all of them have some form of extra attraction or some reason to stay. Now, if you have an RV park that is really close to a city center, you can just, and because you got Starbucks around the corner, you can go to Walmart, whatever. then you typically only put in showers and…

washing facility because now you’re talking more transitional people. Sure, you can have people that stay there monthly as well. But absolutely, you’re more catering for the actual RV pad itself, you probably won’t even have a full time person working there. It’s going to be electronic check in and all those things. For the parks we are looking at, we wanted to try to keep the monthlies under 20 % of the occupancy in the park.

We want the transitional ones, the weekend goers. Those are the people we want to attract to the park because we don’t want to deal with tenants. This is one of the main reason why we are currently not actively doing any, we have a portfolio, but we’re not actively acquiring new multifamily. We don’t want to deal with tenants, dealing with people that are on vacation and are there to experience something. They’re happy. They’re, they, they’re excited.

that’s much more fulfilling. when you then you get a lot more good reviews than you get bad reviews compared to multifamily. Let’s put it like that. Not saying I’m the best multifamily manager, but we still give our tenants really good care. But it’s just different when people are on vacation, they are happier. And yeah, they’re also willing to spend more money, which is why the RV pad itself is you make money there. It’s the majority of the income.

but all the surrounding activities typically in these parks represents 20 to 40 % of the revenue.

Dylan Silver (10:01.262)
So you’re looking at buying pre-existing RV parks. For construction of new RV parks, what I’m imagining there’s specific type of permits or zoning that is required. Are areas zoned for RV park or is it zoned commercial?

Andreas Pettersson (10:17.859)
So it depends. It really depends. The park we just acquired, it’s sown commercial, but then he chopped up a piece of the land and built a 5,000 square foot barnum medium as his primary residence before he sold the park to us. And we now converted that into an Airbnb. So the land is actually split up over multiple parcels with different codes, which makes the whole thing a little tricky. That’s a whole discussion by itself.

It really depends. We have seen several RV parks that were sown. Basically, they took just land and re-sown different areas of the land, depending on if they have restaurants, they have a water park, they have all these other things, or just open forest walking trails. It’s a little bit mixture, like I said. What’s interesting though, is I mentioned the boomers and many of them were

building things, they bought a big piece of land, they build a primary residence there. And then over time, they started developing these RV pads and building the RV pads is not too expensive and full hookup and full everything. It’s not as big number as you might think. But what happened over time is they were sort of piecemealing on more and more and more. And some of the parks we have looked at recently, they might have been slowly developed over 30 years and they have over 200 RV pads now and

frequent guests that keeps coming back. So I hope I answered your question. It really depends, but it’s more commercial than single family. It depends on how the park was developed.

Dylan Silver (11:55.436)
Now I’m thinking about where these parks situated at. It’s interesting because I’m in Texas so there’s lots of open land. I’ve seen a couple of RV parks, don’t get me wrong, but they’re not always obvious, right? So I’m not gonna stumble into an RV park. Or if I do now, it’s gonna be like the red car theory where now I’m looking and I always see the RV parks.

Andreas Pettersson (12:15.405)
You’re going to see them everywhere now. Trust me.

Dylan Silver (12:18.934)
And so my thinking is it’s in some cases maybe a buffer zone between where you have the city and where you have super rural, you’ll have an RV park.

Andreas Pettersson (12:28.227)
Correct. And especially if they are either they are far into a forest somewhere or in a mountain or they are just next to a highway. And that’s very typical. Where in Texas are you?

Dylan Silver (12:42.766)
So I’m currently in North Texas, DFW Metro in a town called Denton, which is really closer to Oklahoma than it is Dallas, quite literally. But it’s still considered DFW Metro. Before that, I was in San Antonio for five years. So I’ve lived a couple different places in Texas. Like them both, but if you’re doing real estate, DFW Metro is the place to be expanding like crazy.

Andreas Pettersson (13:06.169)
So Dallas, this park we bought now, it’s 90 minutes west of Dallas or Dallas Fort Worth area. It’s out in Eastland, Cisco, two smaller town out there. And it’s very close to a highway, but it’s located next to a river. And the park is really built like you have the RV park up by the highway and then down by the river that leads onto Leon Lake.

There is a massive camping area, I said, 24, 25 acres. And then there is a 250,000 gallon spring fed pool that is a destination. People come from Dallas, go there over the weekend and that pool, it can cover hundreds of people. So I’m just saying like, but still it’s next to a highway, but people come there, they stay the weekend.

And they have an amazing time and they walk the forest out there and go out on the lake and do all these other things. But yeah, they’re either, but so why, if we now take this specific park, why don’t we have a big camp store there? Because it’s 10 minutes to Walmart. It is, there is a whole, you can go to restaurants and other things. We might have just, or we have basic sodas and water and ice, but that’s it. and other park we looked at was almost two hours.

in Arkansas into the woods by a lake. And when we, when we arrived there the first time we, felt like, okay, if I get murdered here, no one will ever find out about it. And, it was really, really rural, but we got in there. We drove for a forest through a gravel road, come in and there are like a hundred freaking RVs in there and a beautiful lake.

I’m like, okay, why? What happened here? But the fishing culture there and the the bass fishing is just next to a lake. But they’re massive camp stories needed because you’re probably looking at half an hour 40 minutes to closest convenience store. So very, you have to inspect and adapt. And this is what I mean, you can’t be, I don’t know if you know, the visionary integrator concept in business is basically the person who sees the vision and this grandiose

Dylan Silver (15:12.204)
Wow. Yeah.

Andreas Pettersson (15:24.985)
everything you can do and then you have the chief operating officer, the integrator who typically goes like, well, does that really make sense? A lot of these parks, just because you can do it, you shouldn’t do it. We have stumbled and visited parks where people, feels like they’re making a mini Disney in the middle of nowhere. And I mean, you can’t, you will never get the return on that. And the upkeep and the maintenance is just not worth it.

But that’s why you have to look at what’s the bare minimum attractions you need to make it a destination for people to drive at least two to four hours to get there and then spend the weekend. Then you have something really good going for

Dylan Silver (16:04.238)
So what would be the pull for people who would think I’m either going to go to an RV park versus I’m going to go to a treehouse Airbnb in Arkansas?

Andreas Pettersson (16:15.725)
So first of all, if we take Texas or a lot of the Southern States, RVs are very, very, very common. You want to go with your own things. want to have, typically you just don’t go, you have fishing equipment, you have hiking equipment, you want to bring your own barbecue. And yeah, some people, if you’re a city person, you don’t have kids. Yeah, you might be perfectly fine in a small little house somewhere that has been

Like you go for the experience, the Instagram moment. A lot of RV goers are either families with smaller kids where the parents are just freaking tired of having their kids on an iPad all the time in front of a screen and they want to reconnect with their children. Most RV park goers we are seeing in this specific park are absolutely in that category. Kids that are five to 15 years old. They want to sit in front around a campfire.

some s’mores and just experience a weekend without the screen and connect as a family again. That’s the type of park goers we’re seeing. But if you’re younger, single, don’t have kids, yeah, it might be easier to go to the Instagram perfect Airbnb somewhere or the mini home somewhere or so on. And then the yeah.

Dylan Silver (17:21.624)
Hmm.

Dylan Silver (17:36.398)
I’m thinking about the demographic, Andreas, of a person who owns an RV. It’s not a nominal fee, right? It’s fairly costly to own an RV, right? So it’s more than a truck less than a home, right? So you’re thinking about buying an RV, right? these people who are using the RV parks, how frequently are they going? are you finding that you get lots of people going very often? Or is it more like

almost a once a year type of excursion.

Andreas Pettersson (18:07.011)
No, absolutely. There are multiple demographics here. Okay. So if I break down the last one, I would add in terms of the families, but then you have the boomers, the retirees who want to drive around the country. And then when you have parks in the South that is warmer, you have a lot of winter Texans, for example, people who drive from all the states around to just not freeze over the winter. I think that what we have seen so far is

This is a lifestyle. This is people instead of, I don’t know, playing golf in the weekend. These are people who want to be either nostalgic or an experience what they had as kids growing up as a family now. But they’re absolutely coming back over and over and over again. What they typically do in the summertime frame. So the real season for the one I mentioned now in outside of Dallas.

It’s really three and half months of the year. 85%, 90 % of the revenue comes from that timeframe. The park is full. People come from all over the States before, it’s typically people who travels around and they travel around over the summer timeframe over months. And then the last comment I would say, there’s also a whole thing called glamping, which is glamorous camping, luxury camping.

Dylan Silver (19:27.512)
Yep.

Andreas Pettersson (19:30.957)
Those RVs, I mean, we’re talking million dollars. are, they are literally a small home luxury home on wheels, especially the motor, the motor homes there. It’s I’ve been in one and when I sat, I’m a, I’m a six, three tall and like, had plenty of head space. I’m like, here’s a lot of space in this and it’s a luxury style. I really, if I ever buy one, I’ll buy, I’ll get one of those for myself.

but you would be surprised if we now take the step back and we look at all of this. So why am I doing this? Why am I excited about it? So I need to tell you, the listeners and you just super brief. I’m a, I’ve been, investing in real estate since 2014. I’ve been both an LP. I have run multiple things myself. I have, I’m an angel investor. So I invest in a lot of startups, tech companies. do private money lending and other investment vehicles, just to sum it up quick. The returns I’m seeing here.

are much, much better than I have seen on many of the other asset classes, including multifamily. And as an investor, sure, you’re running a business. Absolutely. You’re running a business. You have to deal with staff or you can hire people that are kind of like property managers, but park managers in the RV space. But the returns are really, really good. have,

Dylan Silver (20:37.667)
Hmm.

Andreas Pettersson (20:58.197)
networked my way into people who owns 50 parks plus, and they are making a lot of money. Many of them comes from multifamily even. And why is there an opportunity now as an investor? It’s because the boomers are retiring. They held this park for a long time. They don’t know what to do with it. There aren’t enough buyers out there. And in the end of the day, you’re actually helping someone who otherwise if they have to sell it, and they sell it at a much lower rate, maybe they’ve been

degrading it for a while. They haven’t really been keeping up with maintenance. They’re worried about selling it and now they’re selling it and they are afraid of a tax hit because they have sat with this for so long. And now I come and I’m like, okay, what price do you want? And then let’s talk about the terms and they get to see their like the park we just bought. had the seller had one real requirement on the whole sentiment of this park. And that was that we kept part of the name because it was his grandmother’s name.

Dylan Silver (21:37.155)
Yeah.

Andreas Pettersson (21:58.585)
And like, of course we’ll do that. But anyway, sorry, I went, so I’m trying to show like from an investor perspective, like yes, it is a business. Yes, there are a lot of diversity in it. Yes, there’s a lot of things you have to oversee, but you can absolutely delegate it, set it up with the right management system, appeal to a larger audience, still have it fairly hands off as an investment and make insane returns.

Dylan Silver (22:02.946)
No, not.

Dylan Silver (22:24.758)
I’m thinking on dress about just how many people would probably be interested in the RV park space if they knew that they could get into it. Right. And so hearing you talk about it, it really simplifies it down and distills it to a perspective of like, if I’m going to be in the commercial space, and I want to be dealing with people who are relatively, you know, you talked about it, you know, on vacation, right, so lower maintenance, they’re not

not the same type of demographic. And on top of that, you’re seeing returns that are outpacing multifamily. This is ripe for people to come in and to invest right now while they can and while we’re in this transitory phase where you have, mentioned the boomers selling these businesses and their loan requirement is just keep the name, right? It’s not something too outrageous, it’s keep the name.

Andreas Pettersson (23:21.369)
keep the name and the park we bought now was fairly small but the seller, he was amazing to work with by the way, he said like this is the price I want for it, I want to keep the name and we’re modifying the name, we’re keeping the main name, her name, it’s called Ines, so our Ines and Ines we’re keeping and then it’s Ines, we’re adding RV Park in there because he had a different name but we’re keeping that.

And then, by the way, we’re updating the website before you Google it. Wait, check back in a month. But what I was saying is that what he wanted to make sure he didn’t have a tax hit. He wanted to spread it out. They’re in their mid sixties would be my guess. They wanted to spread it out over a 10 year timeframe. We negotiated this. This I can say everything I say now, by the way, is

all pro forma, all estimates and so on. But what I’m about to say is actual numbers. We negotiated interest only for seven years at an blended rate of 3%. And if you get a blended rate at 3 % and most of it is seller financed, the returns for the investors are obviously really high.

Because you can’t really secure that type of debt anywhere else today if you go to a bank like I’m seeing six and a half to seven and a half percent Yeah, and then

Dylan Silver (24:48.12)
Yeah, so if you double the cost. people are looking at this, Andreas, and they’re thinking, you know, how do I approach these RV park owners currently? Is it in the places where people go to buy other types of businesses? Are you now, because you’re in the industry, are you now running into more of these people? Are they selling them on specific sites? Where are people going to buy RV parks?

Andreas Pettersson (25:16.099)
They do go to the normal places, the craxy of the world or where, where, that, that I, I’ll give away a little secret. We’re not seeing too many people out doing this right now. otherwise I wouldn’t be talking about it because I actually think I, part of me want to help these people who want to retire. And I also want to create more awareness of an investment opportunity. I think many people are missing because they associated with mobile homes and lower class tenants.

And this is not what it is at all. We actually find a lot of deals that are mislisted as a business. I’ll give you that secret. if go where wherever, I forgot her name, but I see one on social media all the time talking about private equity and buying businesses. Yes. And it’s the same places you would find where you find deals there.

Dylan Silver (26:08.014)
Cody?

Andreas Pettersson (26:13.897)
It’s surprising how often people have listed a restaurant or they have listed it as a water park. by the way, yeah, we have 150 pads as well and a full, full of flesh business. They listed as to what they are emotionally attached to and believe in. And sometimes they are listed by some brokers. Exceptional good. They understand the RV space. Most brokers.

do not transact too many RV parks. So what they end up listing them as is sometimes even a multifamily building.

Dylan Silver (26:49.89)
very interesting. It’s probably one of these deals where there’s a lot of RV parks, which are probably, as you mentioned, up for sale potentially, or people are looking to make an exit. But this hasn’t been so common in the previous decades. Of course, it’s existed, but it hasn’t been what it is now. But the need for maybe a specialized broker to come and list these properly on scale is there now. So there’s just so many ways that you can

You can attack this. I’m thinking about it as an agent myself and I’m thinking like man I never thought about selling RV parks. How cool would that be?

Andreas Pettersson (27:26.233)
And often like the brokers that gets excited about it, we have one now shout out to a person in Georgia. I don’t want to list names here, but basically we said after talking with that person back and forth, I’m going there on Monday and he have scrambled up three parks. They were visiting all on Monday. and all of them underwrites with, I’m going to say underwrites now. So I’m prefacing the numbers they’re underwriting at, can I say the numbers?

Dylan Silver (27:54.37)
Yeah, yeah.

Andreas Pettersson (27:55.129)
They’re underwriting at three to four X returns over five years. They’re underwriting at closer to 30 % IRR. They’re underwriting at 17 to 20 % cash on cash. And like, like those are some really good returns. And then the one rule we say, if there are brokers out there who listens to this, like we would love to work with you. The one rule I have is we have to be able to talk to the seller ourselves because, or

the broker have to be there or the agent have to be really good at seller financing, creative financing, because you can normally not structure a deal. If you go like, you need institutional money, you need to go to the bank or you need whatever loan you need. And by the way, they want this price as well. You can always make a deal if the price is too high, but the terms are really good, we can make a deal if the

price is lower, but the terms are awful, we can still make a deal. But when terms end with the price is high and the terms suck, we can’t make a deal. And that’s typically, if you list it as a multifamily and think multifamily, that’s often the case. But if someone is exceptionally good at creative financing, we’re all for having the disguise, or I’m perfectly fine with having an agent in between, but you often need this. The seller need to get the price they need.

They often don’t need the money right now. They don’t want to tax it. And the broker agent still gets paid. Like it’s nothing different there. We just have to make sure it’s seller finance. The deal we just got, sorry, I just got to put this out there. It is a combination of seller financing, acquiring debt with subject two and or sub two debt, basically taking over an existing commercial mortgage. And it’s also billed in a way where

the person is helping us with the construction and overseeing the construction of 50 % capacity expansion.

Dylan Silver (29:56.044)
Now in these, I’m curious when you’re assuming these loans, are you assuming it and then it’s being put in your name or are you assuming it and then the debt stays with the seller?

Andreas Pettersson (30:08.813)
The debt stays with the seller. And it’s put in land trusts and all these other things to protect everyone on it. But you have to do that in order for it to not become an issue. I’m not an expert myself. We have people on the team that have done a lot of creative deals. There are transaction coordinators as well, so they know how to structure them. But always work with a lawyer that is very experienced of how to set these up.

Dylan Silver (30:10.464)
Okay, so interesting.

Dylan Silver (30:30.712)
Yeah.

Andreas Pettersson (30:37.665)
Even the seller finance part, there needs to be, if you come in with less money, there got to be recourses if you don’t fulfill your part of that. And we have to, even if we are, we as GP on now that we’re, and we have GPS and LPs and we raise capital and blah, blah. But we’re making sure like in the end of the day, we’re protecting the LPs, we’re protecting ourselves and it needs to be protecting the seller as well.

Dylan Silver (30:40.589)
It does.

Andreas Pettersson (31:03.385)
I want to sleep good at night. I’m not an investor who want to take advantage of people. Like I think we die with our integrity and it’s the one of the last things we will think of on our death beds, which means that for me, like I don’t want to hustle this and yeah, I want to sleep good. So I want to make sure everyone is covered.

Dylan Silver (31:23.064)
Yeah, that’s critical, especially with these creative deals. Andreas, we are coming up on time here. Where can folks go to get a hold of you?

Andreas Pettersson (31:33.817)
Instagram is the best way. I’m Andreas the CEO. So Andreas the CEO. It’s on my little tag. So if they’re watching this afterwards, it’s on my tag down here. I answer everything on Instagram myself. If you reach out on LinkedIn, which I’m also very active on, it gets diluted with all the spam I get on LinkedIn. So please reach out on Instagram. I answer all my messages myself.

If anyone listened to this and they’re like, Hey, I, where can I get started on this or where can I learn more? Reach out to me. Like I love talking about these things. if you want ideas of what the deals should underwrite for, if you want to understand how we find the deals, cause some of the deals I didn’t really talk about here, how we find, cause there are some secret sauce to this. reach out. Like, I don’t mind telling you, I just don’t want to put it out too broadly because we are.

still ramping up in the methods we’re doing to get really good deal flow right now.

Dylan Silver (32:34.52)
Yeah, mean, listen, folks, if you’re in the investment space and you’re thinking about different vehicles, this really was eye opening for me. And I think a lot of folks are listening just like I am thinking, I didn’t think I could get into that. Andreas, thank you for giving away some game without giving away all the game. Folks can reach out to you directly. And thanks for coming on the show.

Andreas Pettersson (32:58.669)
Yeah, thank you so much for having me. And also, if there are any investors who want to invest with us, please reach out to me for that as well. I forgot to say that before. Thank you so much, Dylan.