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This is a question I get
asked a lot. There a lot of good answers to this question… here are a few
answers:
- Whenever the seller
is ready to SELL! Sounds simple, but it is true. I often say that it takes
two to tango; a motivated seller is key! Many times that does occur right
after the season ends. He is tired, he is dispirited, he has had it with
the camping business. After a few month of down time, he begins to get up
and somewhat excited about the new season and perhaps less motivated.
- The next question to
ask is “How much work do you need to get read for your first season.” If
you are taking over a run down park, a park that needs promotion, both of
these need time. Some parks are in good shape, have a good ongoing
marketing and advertising plan and you step in and run.
- How much money do you
have after the purchase? The first few months, actually, the first year is
most important. If you buy a park that is open in the summer, you have a
long dry winter. This can be adjusted with deals on the mortgage,
especially if it is owner financing, and even with the bank. You can ask to
have a payment schedule that matches the cash flow of the business.
- Another consideration
is the amount of money in “Advanced Rents”. Check the campground’s policy
on paying for the coming season… this is critical if there are a lot of
seasonals. Some campground get a substantial part of the season’s rent
early, many have to have it in by the first of the year!. If you buy before
the season starts you get all or most of this money. (Again check the
policy… they may have it in the policy that an amount is credited to
“storage” and some of that may be used and not come to you.
- You have to consider
that the process takes time. From the point you decide that “This” park is
the one for you… it takes time to negotiate! It takes time for financing!
It takes time for you and the seller to arrange the move in and out.
But in the end… when you
and the seller are ready to make a deal is the time to buy! Don’t try to
micro-manage the process too much.
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