How I'm Making Profit from an RV Park in Houston

I'm under contract on a $1.4m RV park outside of Houston. Here's exactly how I'll make $475k - $1.5m profit in 6 - 18 months:

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The details:

- 31 RV spots - $500/month each

- 2 mobile homes & 2 apartments - $1,200/month each

- 95% occupied

- On a major highway with 16k cars/day

- No signage or website

- Room to double in size

- $171k/year in place NOI

- In a flood plain, never flooded

- 2/5 acres used

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The financials:

- $1.4m purchase price

- $1m seller financed at 10% and 20 year amm

- $400k cash down

- 11.5% cap rate at purchase

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Plan A:

Raise rents & flip or refi:

- Add HUGE signage & website

- Add marketing

- Raise RV rents by $100 & others by $200

- Add part time property manager

- Hopefully keep occupancy around 95%

- Fix the roads

- Exit or refi at 9.5 cap 

- Roughly $475k net profit in 6 months

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Plan B:

Double the size (if the demand is there):

- Add 31 more RV spots + 2nd gravel road

- Raise rents same as Plan A

- Add x100 portable self storage 10x10 units

- Use self storage to both attract & keep tenants & capture more revenue

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Cost: ~$700k-ish

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Potential profit:

If everything is ~80% occupied, and after adding another $4k in monthly overhead it would be worth ~$3.7m at a 9.5% cap for a potential profit of $1.5m in 12-18 months.

$1.4m purchase

$100k repairs + marketing

$700k capex

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$3.7M Exit - $2.2M all in = $1.5m profit

Of course, anything can and will likely go wrong.

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The flood plain doesn't scare me, as this is Houston, and RVs are movable. This park has never flooded and the pads are built up high for this reason.

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We've never added portable SS before, so this will be new.

The primary reason for SS is because this location is killer, competition is scarce and it really attracts tenants.

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Will prob need a retwit storage bro's help on it.

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Should also drive the cap down but we aren't underwriting for it.

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Excited!

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