Latest / The Camp Owners Podcast / Current State of Camp Valuation - With Robert Lebby - The Camp Owners Podcast #77

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Current State of Camp Valuation - With Robert Lebby - The Camp Owners Podcast #77 · The Camp Owners Podcast

0:39
SPEAKER_01: Welcome back, listeners, to the Camp Owners Podcast.
0:43
SPEAKER_01: We are back for season seven, episode number 77.
0:47
SPEAKER_01: And we are super excited to kick things off with Robert Levy, camp consultant, camp legend, officially, unofficially.
0:56
SPEAKER_01: We have him on our first episode of the season to talk about the current state of the state of camp sales and evaluations with the bankruptcies and sales that happened in the camp world this summer.
1:08
SPEAKER_01: We were curious to know what does what did that do to the camp world of sales and evaluations?
1:13
SPEAKER_01: What does that look like?
1:14
SPEAKER_01: What is interesting for people to know about that?
1:17
SPEAKER_01: And how are things looking from his experienced eyes?
1:20
SPEAKER_01: So take a listen.
1:22
SPEAKER_01: We hope you enjoy it.
1:22
SPEAKER_01: We learned a lot.
1:24
SPEAKER_01: We think you will as well.
1:25
SPEAKER_01: And get excited for another season with us.
1:28
SPEAKER_00: This is the Camp Owners Podcast from GoCamp Pro, exploring best practices and issues that professionals in the private camp industry face every day.
1:37
SPEAKER_00: You can find our show notes at gocamp.pro slash ownerspod.
1:41
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1:45
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1:52
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1:56
SPEAKER_04: Thanks to our friends at Camptivities for sponsoring the Camp Owners Podcast.
2:01
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2:23
SPEAKER_01: Welcome to the Camp Owners Podcast, a space for camp owners to talk about the unique aspects of camp ownership and get inspired by each other.
2:30
SPEAKER_01: We sit down with camp industry experts, leaders, and fellow camp owners to discuss the big issues in the private camp world.
2:37
SPEAKER_01: Hello, everyone.
2:38
SPEAKER_01: My name is Kelly Shuna.
2:39
SPEAKER_01: I co-own and executive direct Hidden Pines Ranch Day Camp located in Stillwater, Minnesota.
2:45
SPEAKER_04: Hi, everyone.
2:46
SPEAKER_04: My name is Howie Grossinger, and I am the co-owner director of Camp Robinhood, a day camp in the suburbs of Toronto, and a co-owner of Camp Walden, a private co-ed camp in Ontario.
2:59
SPEAKER_04: If you're looking to find and subscribe to the Camp Owners Podcast, you can either find us online at gocamp.pro slash ownerspod or by searching for us in your favorite podcast app.
3:10
SPEAKER_04: Finally, if you're listening to this and think it would be useful to other camp owners or aspiring camp owners in your network, please feel free to send them a note and have them listen to all the episodes that we have provided over, oh my gosh, into our seventh year.
3:28
SPEAKER_04: Kelly, before we say hello to our guests, I just want to thank, of course, continuing to be our sponsors, Camptivities.
3:36
SPEAKER_04: Kelly and I are so grateful to the team at Camptivities for continuing to sponsor us into our seventh season of the Camp Owners Podcast.
3:46
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3:55
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3:56
SPEAKER_04: Kelly, we're back.
3:57
SPEAKER_01: We're back, baby.
3:58
SPEAKER_01: And we did it, right?
4:00
SPEAKER_04: We did it.
4:01
SPEAKER_04: We got through the summer.
4:02
SPEAKER_01: We did another summer that always feels so good.
4:05
SPEAKER_04: It does.
4:05
SPEAKER_04: You're feeling good?
4:07
SPEAKER_01: I am feeling good.
4:08
SPEAKER_01: I'm really leaning into just fall and having a little reprieve and taking some time back for myself.
4:15
SPEAKER_01: So I am feeling good.
4:17
SPEAKER_01: I launched two kids to college this August, I should say.
4:21
SPEAKER_01: So that feels good.
4:22
SPEAKER_01: But yeah, I'm good.
4:24
SPEAKER_01: How are you?
4:25
SPEAKER_04: I'm feeling really good.
4:26
SPEAKER_04: I, you know, I we had a very unique summer.
4:29
SPEAKER_04: Sari and I took a two-week break, which we've never done because we welcomed our first grandchild this summer.
4:36
SPEAKER_04: And that was pretty cool.
4:38
SPEAKER_04: And so shout out to Jordana, our daughter, who led the team and so proud.
4:44
SPEAKER_04: And really marks for us officially kind of the next chapter of our involvement in camp and family and stuff like that.
4:52
SPEAKER_04: I know there are many listeners who have gone through that and currently going through that.
4:55
SPEAKER_04: So feel I've joined a new club, which is pretty cool.
4:58
SPEAKER_01: That's a big deal to step away for two weeks.
5:01
SPEAKER_01: Just does a lot about trust and Jord and just even you.
5:05
SPEAKER_01: That's that's a big deal.
5:07
SPEAKER_01: So I'm glad it was successful and felt good.
5:10
SPEAKER_01: And that's great.
5:12
SPEAKER_04: Yeah, no, really, really good.
5:13
SPEAKER_04: And learned a lot along the way from a lot of people who've been guests on the show on navigating this.
5:18
SPEAKER_04: But until you're in it and figuring out how to navigate it in your own set of circumstances, you really don't know.
5:25
SPEAKER_04: So yeah, super, super pumped about the way it went and excited to explore another season of topics, another season of amazing guests who can help us move this private camp ownership experience forward.
5:40
SPEAKER_04: There's gonna be lots of stuff that I know over the course of our monthly episodes that we're excited to explore.
5:48
SPEAKER_04: But we definitely wanted to kick things off with probably the most relevant or prevalent news in the industry.
5:56
SPEAKER_04: And Kelly, maybe you could introduce our guest to get it started.
6:00
SPEAKER_01: Yes, I'm happy to.
6:02
SPEAKER_01: So today for our first episode of season seven, episode 77, that's a lot of sevens.
6:09
SPEAKER_01: We're we're gonna sit down with Robert Levy.
6:12
SPEAKER_01: I would say camp legend, but technically camp consultant.
6:15
SPEAKER_01: Robert has a ton of experience working with camp buyers and sellers to navigate the many financial, technical, and emotional questions and decisions that need to be made before and after a price has been agreed upon.
6:28
SPEAKER_01: We asked him to come and talk with us because we want to talk about camp evaluations, most importantly, the current landscape of camp sales and what he's learned, what he has learned over the years working with camps during such an important process and really just the state of the state with what that's like right now.
6:43
SPEAKER_01: We're excited to learn from him today as we kick off our new season of the Camp Owners Podcast.
6:48
SPEAKER_01: So welcome, Robert.
6:49
SPEAKER_01: We're so happy to have you.
6:50
SPEAKER_02: Thank you.
6:51
SPEAKER_02: Welcome to be here.
6:52
SPEAKER_02: Glad to be here.
6:53
SPEAKER_01: How did it take seven years to get you on here?
6:56
SPEAKER_02: I do exactly.
6:58
SPEAKER_02: I had to first learn about what a podcast was before you could have me on it.
7:02
SPEAKER_02: So this is good.
7:03
SPEAKER_02: I love it.
7:05
SPEAKER_01: Great.
7:05
SPEAKER_01: Well, we always kick off, Robert, with our guests kind of giving their camp origin story.
7:10
SPEAKER_01: So, how did you get into camping?
7:12
SPEAKER_01: Tell us about your journey of from then to now for those that know you, and a little reminder for those that know you and might learn something new.
7:19
SPEAKER_02: Well, cool.
7:20
SPEAKER_02: I got started in summer camp as a kid when I went to a camp in Colorado, learned how to ride a horse.
7:26
SPEAKER_02: I got into sports and that took care of my camping career until I was a junior in college.
7:32
SPEAKER_02: When a close friend of mine called and said, Hey, hey, how would you like to work at this camp in northern Wisconsin?
7:38
SPEAKER_02: I said, Sure, why not?
7:40
SPEAKER_02: So I worked in 1972 at North Star Camp for Boys in Hayward.
7:44
SPEAKER_02: And it frankly I've never left.
7:46
SPEAKER_02: So that's how I got started.
7:48
SPEAKER_02: I started there as a counselor, horseback riding instructor, bought the camp in 1979 and had a wonderful career.
7:56
SPEAKER_02: Sold it about 16 years ago to a general camper who wanted to buy the camp when he was 15 years old.
8:03
SPEAKER_02: And I told him he was a little bit young.
8:05
SPEAKER_02: And then when he graduated from college, he said, Am I ready?
8:07
SPEAKER_02: And I said, No, go get another job, which he did.
8:10
SPEAKER_02: And then about three years later, he was telling me how to run my business, and it worked out great.
8:15
SPEAKER_02: And he's he's done fantastic.
8:18
SPEAKER_02: So that led me to helping others buy and sell camps.
8:23
SPEAKER_02: But I think the biggest skill is what you learned at camp as a counselor and director working with people and learning how to solve problems and listening very carefully, because that's to me the biggest skill involved in helping people buy and sell camps.
8:40
SPEAKER_02: Listening to what each side has to say.
9:25
SPEAKER_02: Thanks.
9:26
SPEAKER_02: It first started when the the gentleman who I bought my camp from made it clear that it would be important to be involved in the American Camp Association.
9:35
SPEAKER_02: He was very active, so I became active right from the beginning.
9:38
SPEAKER_02: The initially, the I felt that my talents and skills would be best with the independent camp movement.
9:46
SPEAKER_02: At that time, it was the PIC, private independent camp world.
9:51
SPEAKER_02: Marvin Black, when I was the president when I first got involved, he was a wonderful gentleman.
9:57
SPEAKER_02: Over time, that evolved into the AIC, Association of Independent Camps, when the organization felt that it would be best if they had their own voice to make decisions.
10:09
SPEAKER_02: And that evolved into the Camp Owners and Directors Association.
10:13
SPEAKER_02: So over time, those three organizations have been representing the independent camp world, some with more autonomy than others.
10:21
SPEAKER_02: And so that that was the evolution.
10:24
SPEAKER_02: So and as a result, the camp business, if you will, became much more uh structured and it became much more organized.
10:34
SPEAKER_04: Yeah, and I think that a lot of us have benefited from all the collegiality of being together in the same room as you know, independent camp operators and being able to hear the stories and listen to the trends and adapting to all the things that change over issues of you know what's happening in government or what's happening to the financial markets and ultimately the wherewithal for our clients to continue to sell, send their kids to us, and we all continue to provide these wonderful experiences.
11:08
SPEAKER_04: Robert, our motivation today is to unpack a little bit about the state of camp valuations, the state of buying and selling camps, and and largely because the big news of the summer was that we found, I think, and you can correct me, but for the first time, that the industry has felt frontline news around independent camps ending up in the bankruptcy courts and the unfortunate situation where families were affected, at least the perception of the future of camps that they were associated with, and and just you become such an important voice, in our opinion, because you've seen the evolution of camp ownership from families to individuals to private equity to groups, et cetera.
12:01
SPEAKER_04: And we end up in a situation where the future of a certain segment of the independent and kind of organized camping world, those camps became in jeopardy.
12:12
SPEAKER_04: And it ended up in the courts and ended up being, if many of us have, I know have followed, you know, being frontline news and a lot of a lot of outlets.
12:20
SPEAKER_04: So generally speaking, we wanted to kick off just you know, your thoughts on what transpired and sort of where things are at, but also wanting to springboard off of that into your tips and your advice to people who are looking at this time in light of this news of what we should be thinking about as we consider either selling or buying.
12:43
SPEAKER_04: And just want to leave it to you to give some thoughts so that I know Kelly has some follow-ups as well.
12:49
SPEAKER_02: Well, that was a big question right there, Howie.
12:52
SPEAKER_04: Yes, it was.
12:53
SPEAKER_04: You can unpack it in any way that you want.
12:55
SPEAKER_04: Um, really, really wanted you to sort of formulate your own thoughts on on getting this conversation going.
13:02
SPEAKER_02: Well, first, I'd I'd just like to clarify that the as a owner director of my own independent camp, I loved it.
13:11
SPEAKER_02: And I had many, many friends that were owner, not owners, but directors of agency camps, organized camps, nonprofit camps.
13:21
SPEAKER_02: The job is the exact same.
13:23
SPEAKER_02: So there was no intent to appear that the independent camp world was any different organizationally than uh than a nonprofit camp.
13:34
SPEAKER_02: And so those skills were the different were the same.
13:37
SPEAKER_02: And so the the the conferences that we had, ACA conferences, very valuable.
13:43
SPEAKER_02: I know you've had people like Michael Branwein on your podcast.
13:47
SPEAKER_02: He was phenomenal.
13:49
SPEAKER_02: And that what I saw in the difference, I had a went to college and got a degree in management science and business economics.
13:56
SPEAKER_02: So those are the skills that I brought along with my concepting skills running the camp.
14:01
SPEAKER_02: So the bankruptcy huge.
14:05
SPEAKER_02: And it there's a lot to unpack from that.
14:09
SPEAKER_02: The I'm not sure where where you want me to start with what I think will happen.
14:15
SPEAKER_02: From the public standpoint, I don't think it had an impact at all.
14:20
SPEAKER_02: I I don't think from the public viewpoint, they are really cognizant of this.
14:26
SPEAKER_02: I'm not sure that they're paying attention to it because of how quickly the bankruptcy issues were settled and dealt with.
14:35
SPEAKER_02: The I know that because I've been in touch with CAP directors recently, and their enrollments are full.
14:42
SPEAKER_02: They are, I mean, they're they're where they are supposed to be.
14:44
SPEAKER_02: Some are full, but their enrollment has not, it does not appear that the enrollment has changed because of the bankruptcy.
14:52
SPEAKER_02: So from the public viewpoint, I'm not so sure there's a change.
14:56
SPEAKER_02: The change perhaps is from the financial world, the banking world, and perhaps even more important, the courts that decided to that this was important.
15:09
SPEAKER_02: And so the speed at which this bankruptcy went through its course was absolutely phenomenal.
15:15
SPEAKER_02: I've talked to bank presidents, I've talked to business people who have said there's no way a bankruptcy gets settled in two months.
15:22
SPEAKER_02: It just doesn't happen.
15:23
SPEAKER_02: This should have taken a year, two years.
15:26
SPEAKER_02: But the bankruptcy court to his to their, it was a woman, I believe, her credit, and the administrator who was in charge of dealing with the bankruptcy, understood that this had to be settled immediately in order to protect the industry.
15:43
SPEAKER_02: The fact that they did that to me is a huge plus and is a huge indication that the world has taken notice of what what the camp industry is.
15:54
SPEAKER_02: I I feel that is is important.
15:57
SPEAKER_04: Yeah.
15:59
SPEAKER_04: I'm curious, Kelly.
16:00
SPEAKER_04: Just I just one of the things that I I wanted to ask Robert is that I agree with all of that.
16:05
SPEAKER_04: I I'm also curious that, you know, for the first time I felt that this news brought a topic up that I think a lot of families just maybe just assumed.
16:17
SPEAKER_04: That this world where, hey, my camp director owns my camp.
16:22
SPEAKER_04: And I'm I'm curious about, you know, I think for the first time there may be a curiosity in terms of our clientele given this news about, you know, the all these, all of our wonderful colleagues who run these camps, some of whom are directors and some of them have an ownership stake.
16:38
SPEAKER_04: And and maybe this brings up an area of curiosity as we sell camp in the future that maybe didn't exist to the degree that it might give in this news.
16:49
SPEAKER_04: I wonder if, you know, that was one thing that was just on my mind.
16:52
SPEAKER_04: I just wanted a thought on that.
16:54
SPEAKER_04: Do you own your camp?
16:55
SPEAKER_04: Is the question.
16:55
SPEAKER_04: Like you run the camp.
16:56
SPEAKER_04: Do you own it?
16:57
SPEAKER_04: I want to know how secure like parents wanting to know that.
17:02
SPEAKER_01: Do you think that there was for some camps that parents were asking more questions or more curious about who owned them?
17:08
SPEAKER_02: Is that a question to me?
17:09
SPEAKER_01: Yeah.
17:11
SPEAKER_02: I I the camps that I've talked to within the past two or three weeks are doing great.
17:19
SPEAKER_02: Their their enrollments are full or doing exactly, as I said earlier, exactly where they are.
17:24
SPEAKER_02: And I would have thought that I would have suggested what you just said that that parents might be asking, who who are the owners?
17:34
SPEAKER_02: Are you the owner or not?
17:35
SPEAKER_02: Yeah.
17:36
SPEAKER_02: Through the bankruptcy process early on, when and I was involved early in this whole process, I knew about it.
17:44
SPEAKER_02: I was contacted by folks that were involved, personally involved, and the organizations, the Israeli bondholders contacted me.
17:52
SPEAKER_02: And I would have thought that this would be a huge red flag across the industry.
18:00
SPEAKER_02: But I'm not seeing that.
18:02
SPEAKER_02: What I am seeing is camps that closed and that were bought out of bankruptcy for another entity.
18:10
SPEAKER_02: And the folks that were going to the kids that were going to those camps, there's a vacuum.
18:16
SPEAKER_02: So that that has been a boon to some folks where their enrollments probably have increased because families looking for a place for their kids.
18:25
SPEAKER_02: I have not seen a negative reaction to this.
18:28
SPEAKER_01: Now it might be out there and maybe I just don't know it, but you know, the it's so there were a few camps that just had to close operations altogether.
18:40
SPEAKER_02: Yes.
18:41
SPEAKER_02: Absolutely.
18:42
SPEAKER_01: How many do you think that was?
18:44
SPEAKER_02: Not many.
18:44
SPEAKER_02: Out of out of 30, we're talking about I don't know for sure, but three, four, five, maybe.
18:53
SPEAKER_02: Some were bought and turned into other types of programs.
18:58
SPEAKER_02: And the result is maybe one of your other questions was what's the impact?
19:01
SPEAKER_02: There's a lot of buyers out there.
19:03
SPEAKER_02: I've had I've had calls from people wanting facilities.
19:09
SPEAKER_02: And and there are people out there that want to buy camps.
19:12
SPEAKER_02: The the bankruptcy made it clear that this is a good business.
19:19
SPEAKER_02: The brothers didn't go bankrupt because they were losing money.
19:23
SPEAKER_02: The camps were making money.
19:25
SPEAKER_02: And that became very evident.
19:27
SPEAKER_02: And the way they were able to borrow money from the banks or from the bondholders based upon a valuation that no one had ever suspected was real.
19:38
SPEAKER_02: But it was, and I know it was.
19:41
SPEAKER_02: And so that's made camps perhaps an investment opportunity.
19:47
SPEAKER_02: And I've seen that recently.
19:49
SPEAKER_02: Very this week, very recently.
19:51
SPEAKER_02: Calls from people wanting to buy camps.
19:55
SPEAKER_01: And are those so you spoke a little bit about people wanting the so people wanting to buy camps?
20:01
SPEAKER_01: Is that a mix of current existing programs that need a facility and a new home?
20:09
SPEAKER_01: Or are you also getting calls from people or investment groups or private equity that maybe would have wanted nothing to do with camp as a business that are like, ooh, I want to get into the camp business?
20:21
SPEAKER_02: Yes, both.
20:22
SPEAKER_02: Both of those are happening.
20:24
SPEAKER_02: And I think this the bankruptcy for the money folks out there who were paying attention realize how did these guys get to the point where they could borrow hundreds of millions of dollars?
20:36
SPEAKER_02: How did that happen?
20:37
SPEAKER_02: And if they can do that, and they they had a billion-dollar business, they had two different entities.
20:43
SPEAKER_02: One was summer camps, and others were apartments and shopping centers and office buildings.
20:49
SPEAKER_02: How did they do that?
20:51
SPEAKER_02: And so there are other folks out there that are going, well, if if if they're gonna if they can do that, I can do that.
20:59
SPEAKER_02: Maybe.
21:00
SPEAKER_02: Maybe.
21:01
SPEAKER_02: Yeah.
21:02
SPEAKER_01: How do you feel about that?
21:04
SPEAKER_02: Well, I feel it's it's very interesting.
21:06
SPEAKER_02: That's a good question.
21:07
SPEAKER_02: How do I feel?
21:09
SPEAKER_02: My hope, excuse me, when this all started was that all the operators who were running the camps would be able to continue operating those camps.
21:18
SPEAKER_02: That was that was my goal.
21:20
SPEAKER_02: Not that I had anything to do with it, but so I feel it's unfortunate that camps are closing.
21:29
SPEAKER_02: Second, third generation camps closed.
21:32
SPEAKER_02: And that I find really distressful.
21:36
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22:02
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22:06
SPEAKER_04: Given the inquiries you've been receiving, Robert, I'm curious, does the interest in camps, is it across the country?
22:13
SPEAKER_04: People are interested in very in a cross-section geographically of the states.
22:18
SPEAKER_04: And I don't know if it's even impacted Canada, but I know that you just I'm just curious about is it is there a focus on the Northeast?
22:25
SPEAKER_04: If you're getting inquiries, I want to buy a camp in the Midwest, etc.
22:29
SPEAKER_04: Is it all over the place?
22:30
SPEAKER_04: Is it as yeah, it's all over.
22:32
SPEAKER_02: It's proportional to where the the number of camps in that particular location.
22:36
SPEAKER_02: Gotcha.
22:37
SPEAKER_02: Yeah.
22:39
SPEAKER_01: I wonder, I've been curious too about the timing of all of it.
22:45
SPEAKER_01: If this would have gone down in the off season, right?
22:51
SPEAKER_01: Not the heat of the summer.
22:53
SPEAKER_01: If it would have gone down differently, if there would have been just more chatter in the camp industry, if parent person, you know, I just think that the timing from my perception was probably couldn't have been better a little bit.
23:09
SPEAKER_01: I know it was stressful, but also I think the speed at which it happened, the trust of parents to experience, like my camp still happened.
23:18
SPEAKER_01: Things, I mean, I'm sure again, from the operators, it was very stressful and unsure at times.
23:23
SPEAKER_01: But I think the fact that it happened so quick, it was in the middle of summer.
23:27
SPEAKER_01: Other operators, there really couldn't be a lot of discussion, chatter getting involved because everyone was too busy.
23:33
SPEAKER_01: That I do wonder if the timing was a positive aspect and a positive aspect in some regards to why it maybe you know went quick or went down as it did.
23:45
SPEAKER_02: Well, from that point of view, yes, I believe it was a positive for that.
23:50
SPEAKER_02: Families were enrolled, the money was already collected, their kids were already going to camp.
23:55
SPEAKER_02: What were they going to do?
23:56
SPEAKER_02: And so from the other standpoint, very negative for those camps that were impacted, because all of a sudden the operating money that was there for the summer wasn't there.
24:09
SPEAKER_02: Where did that money come from?
24:10
SPEAKER_02: That's a different subject, and happy to go there if you like.
24:14
SPEAKER_02: But the the the fact that the families that that's what I mean when I don't see the impact.
24:20
SPEAKER_02: The kids went to camp, they had a great summer, and the for the camps that are open, they're enrolling for next year.
24:27
SPEAKER_02: So from their point of view, oh, it was just a little hiccup that we had.
24:32
SPEAKER_02: Very stressful for the camp.
24:34
SPEAKER_02: No Derek and orders.
24:36
SPEAKER_02: Oh my gosh.
24:37
SPEAKER_03: Yeah.
24:38
SPEAKER_02: Where's the next tranche of money coming from?
24:40
SPEAKER_02: How are we going to get through this?
24:42
SPEAKER_02: That's a whole different subject.
24:44
SPEAKER_01: Yeah, I can't imagine of that.
24:47
SPEAKER_01: Campers are coming.
24:48
SPEAKER_01: I mean, the basics, food, all of all of the basic bills and things that you need.
24:53
SPEAKER_01: Are you able to share where how how did they get money to continue operating in that moment?
24:59
SPEAKER_02: What happened was the much of this money came from Israeli bondholders.
25:03
SPEAKER_02: Okay.
25:04
SPEAKER_02: And the the brothers went bankrupt, as you know, and it happened right at the end of May, right when camp was going to start.
25:12
SPEAKER_02: And those 30 camps, however many there were, didn't have operating funds.
25:17
SPEAKER_02: The money was gone.
25:19
SPEAKER_02: So the Israeli bondholders who had have loaned out hundreds of millions of dollars had a decision to make.
25:26
SPEAKER_02: They had to decide are we going to just let the chips fall and go through bankruptcy, which could take a year and a half?
25:33
SPEAKER_02: Or are we going to provide the dip funding, debtor in possession, money that allows the camps to continue?
25:41
SPEAKER_02: And they did their research.
25:43
SPEAKER_02: They called some folks, they found out that the valuations that they had used to loan the money were actually accurate, that the camps were actually profitable.
25:54
SPEAKER_02: So they loaned$80 million or so into the fund.
25:58
SPEAKER_02: And those that's how the camps were able to operate.
26:03
SPEAKER_02: They could have lost hundreds of millions of dollars, or they could have bet that their$80 million were going to be useful and keep the camps in operation because they were told that if you don't open and you have to re and you aren't even able to refund money to the families that have already paid, the industry is in huge trouble.
26:26
SPEAKER_02: And your investments, your hundreds of millions of dollars are basically going to be workless.
26:32
SPEAKER_01: I haven't heard that term before.
26:33
SPEAKER_01: I don't know if you have Howie, but dip, so debtor in progress.
26:37
SPEAKER_02: And possession.
26:38
SPEAKER_02: In possession.
26:39
SPEAKER_02: Yeah, DIP.
26:40
SPEAKER_02: And they had a first position.
26:42
SPEAKER_02: So the$80 million were in first position to get them.
26:45
SPEAKER_02: So they were comfortable they were going to get their$80 back, but they were worried about their hundreds of millions that they loaned.
26:52
SPEAKER_01: So they would get it back.
26:53
SPEAKER_01: They would get it back in the sales of those camps is how they were going to get that back.
26:57
SPEAKER_02: Through the through the bankruptcy process.
26:59
SPEAKER_02: Okay.
27:00
SPEAKER_02: Right.
27:00
SPEAKER_02: Whatever that looked like.
27:02
SPEAKER_02: And typically that takes years.
27:05
SPEAKER_02: This happened in like two months, two and a half months.
27:08
SPEAKER_04: Yeah, it was a it was it was like hyper speed, how that all it all went down, just very, very well.
27:15
SPEAKER_04: That that overview and assessment of the state of the industry in light of that is really helpful.
27:22
SPEAKER_04: And I think Kelly and I were you know super curious about that.
27:26
SPEAKER_04: I I think I think a lot of listeners are gonna really appreciate that insight for sure.
27:31
SPEAKER_04: I think for us, Robert, is is is now looking at the state of affairs.
27:36
SPEAKER_04: We've got lots of buyers.
27:38
SPEAKER_04: I'm sure, you know, we in the industry, as you know, there are moments where we look at each other and say, do we really, do we really want to do this anymore?
27:46
SPEAKER_04: You know, should we should we we had a good run?
27:49
SPEAKER_04: Let's see if we can get something.
27:51
SPEAKER_04: So I guess what I'm hearing is that if anybody out there is thinking about, you know, maybe I've had a good run and maybe it's time to sell my camp, it's nice to hear that there are people who might be interested to to to to do that.
28:04
SPEAKER_04: I thought that for this next phase of our discussion, we could just, you know, jump into sort of, you know, I'm contemplating selling.
28:13
SPEAKER_04: What are some of the things I need to do next?
28:15
SPEAKER_04: You know, like just kind of just, you know, your, you know, Kelly and I are coming to you and we're saying, hey, we want to sell our camp.
28:24
SPEAKER_04: What are some things you'd like us to do in the short term and things to think about?
28:28
SPEAKER_04: And then maybe from a buyer perspective, you know, maybe some advice to all of us who have to engage potential buyers and the role that someone like you can play in bringing people together and and kind of consummating a potential sale?
28:44
SPEAKER_04: I just thought I would leave it in your hands to maybe take us through some of your immediate thoughts about some of and all of those things to the degree that we can talk for another seven hours.
28:53
SPEAKER_01: But Robert, can you can you also, when you're talking about buyers, I'm thinking about the people listening.
28:59
SPEAKER_01: Can you include one?
29:02
SPEAKER_01: How did people even know that these camps were for sale?
29:05
SPEAKER_01: Like, I again, I was in the summer, but I didn't get an email like, hey, you want to buy these 10 camps?
29:12
SPEAKER_01: Like, I'm curious, how did these people know about it?
29:15
SPEAKER_01: Like, is there an underground communication that I don't know about that tells you these things are for sale?
29:20
SPEAKER_04: It's on the dark web.
29:21
SPEAKER_04: It's on the dark web.
29:23
SPEAKER_01: Right?
29:23
SPEAKER_01: Is there a dark web?
29:24
SPEAKER_01: But also, like, how did the people know?
29:27
SPEAKER_01: And then how do buyers kind of know?
29:30
SPEAKER_01: Because we've talked about this before.
29:32
SPEAKER_01: It's not like you're advertising, like, hey, hand run drainage is for sale.
29:35
SPEAKER_01: Everybody freak out, but it's gonna be fine.
29:37
SPEAKER_01: Like, talk about that piece from the buyers because it is kind of a thing.
29:42
SPEAKER_02: Okay, so between you and Howie, I can now speak talk for another about 45 minutes.
29:47
SPEAKER_02: So I'll try to expedite this whole thing for you.
29:51
SPEAKER_02: First off, Howie, when when when you start when a camp owner, director owner starts thinking that it might be time to sell, once that hits, it happens much quicker than you anticipate.
30:07
SPEAKER_02: So what you do, you need, in my opinion, you need to plan ahead.
30:13
SPEAKER_02: I see the trap that camp owners get into, which is they're thinking they want to sell, they're thinking they want to sell, they're thinking about it.
30:22
SPEAKER_02: Boom, I want to sell tomorrow.
30:25
SPEAKER_02: And the biggest, one of the biggest problems is camp owners, or business actually, business people, because I've done some of that as well.
30:34
SPEAKER_02: Business private business owners can do whatever they like with their revenue.
30:39
SPEAKER_02: And so one of the biggest problems is I'm using next year's money for this year's expenses.
30:46
SPEAKER_02: So I've got two million dollars in deposits for next summer in September.
30:52
SPEAKER_02: Fantastic.
30:54
SPEAKER_02: Let's go somewhere, let's do something.
30:57
SPEAKER_02: And then they decide in November or September, I want to sell.
31:01
SPEAKER_02: Okay, great.
31:03
SPEAKER_02: So now the process.
31:04
SPEAKER_02: The process is you can do it yourself.
31:08
SPEAKER_02: I I'll, if you like, I can give you the metrics of how you can value your camp.
31:12
SPEAKER_02: You don't need anybody to do this for you.
31:15
SPEAKER_02: You can do it yourself.
31:17
SPEAKER_02: And then the the the complexity and the emotion of the sale comes into into play.
31:24
SPEAKER_02: That's where you might need some help.
31:27
SPEAKER_02: But okay, so now that was that was that.
31:31
SPEAKER_02: But to a buyer, and I get to to to a buyer, how do you find something?
31:38
SPEAKER_02: I get calls and I suggest that they look at the American Camp Association website.
31:44
SPEAKER_02: You look at you you determine where do you want to be.
31:47
SPEAKER_02: Do you want to be in the Midwest?
31:49
SPEAKER_02: Do you want to be out west?
31:50
SPEAKER_02: Do you want to be on the East Coast?
31:51
SPEAKER_02: Do you want to be down south?
31:52
SPEAKER_02: The AC has it all broken down.
31:54
SPEAKER_02: You can camp owners and directors association, you can see where the camps are located.
31:58
SPEAKER_02: And I'll suggest to folks that want to buy a camp, find the guys that you know are in their 60s or 70s.
32:05
SPEAKER_02: Send them an email.
32:06
SPEAKER_02: Let them know that you're interested in buying a camp.
32:09
SPEAKER_02: Not theirs, but you're interested in the profession.
32:12
SPEAKER_02: Maybe you'll find somebody that is thinking about it.
32:15
SPEAKER_02: And so you get a job.
32:17
SPEAKER_02: Work as a program director, work as a counselor like I did my first year.
32:21
SPEAKER_02: I had no intentions of buying a camp, but I was a counselor my first years.
32:26
SPEAKER_02: And so that's how they get involved.
32:29
SPEAKER_02: So is there a dark web?
32:32
SPEAKER_02: The American Camp Association has a marketplace, so you can sometimes see camps listed.
32:38
SPEAKER_02: I've posted there and I get a lot of calls.
32:42
SPEAKER_02: You put a you put your name up there, you'll get calls.
32:45
SPEAKER_02: There are people that want to buy.
32:47
SPEAKER_02: All right.
32:48
SPEAKER_02: Most people don't want to do that because obviously you don't want it out there that your camp is going to be sold.
32:54
SPEAKER_02: Because you're afraid that your families won't send their kids anymore.
32:58
SPEAKER_02: So many times if you called me and you said you wanted to sell, my first question might be Is there somebody on your staff that could buy it?
33:08
SPEAKER_02: You could say, Yeah, but they don't have any money.
33:12
SPEAKER_02: So now we talk about the process of how that how you can make that happen.
33:16
SPEAKER_02: And there is ways to make that happen.
33:18
SPEAKER_02: So that's how many camps are sold through their own network.
33:22
SPEAKER_02: You don't even have to advertise.
33:24
SPEAKER_02: So that's that's the answer to that question.
33:27
SPEAKER_02: It it's it it's it's tricky.
33:31
SPEAKER_02: I have a list of people that want to buy camps, and there's 10-15 people that I could call, all different ranges, all different ranges, all different goals.
33:40
SPEAKER_02: Some were camp campers that love the profession, and some are have businesses now and they need another facility.
33:51
SPEAKER_01: I don't know if I answered all your questions, but that's you did how do you how do you think people knew about these particular camps up for sale?
33:58
SPEAKER_02: Which ones?
33:58
SPEAKER_02: The bankruptcy?
33:59
SPEAKER_01: The ones from yeah, the bankruptcy ones.
34:02
SPEAKER_02: There's a whole network.
34:04
SPEAKER_02: Yes, there's a whole network of this is this would take me into what it was like for Howie's father-in-law and mother-in-law running their camp to today's world.
34:16
SPEAKER_02: All right.
34:17
SPEAKER_02: It used to be just families, uh kids, alumni bought their camps, and then it moved to camp owners that saw the value of of buying a camp, of owning a camp, and they bought a couple.
34:30
SPEAKER_02: I owned three at one time, and so and and sold and sold all ultimately all three of them.
34:36
SPEAKER_02: But yeah, you know, camp owners that see the benefit and they see the the consolid con consolidation process of ownership of two or three.
34:47
SPEAKER_02: You can, you know, you can you can do well.
34:50
SPEAKER_02: Then move to some groups having 10, 15.
34:54
SPEAKER_02: All right, that's a little bigger.
34:55
SPEAKER_02: That's the consolidators.
34:57
SPEAKER_02: Some of the people involved in those 10 or 15 camps were nationally known folks that were that were high profile business people.
35:07
SPEAKER_02: So the fact that wealthy people coming into camp ownership is not new.
35:12
SPEAKER_02: They just didn't advertise it.
35:14
SPEAKER_02: They just they love camp for whatever reason.
35:17
SPEAKER_02: They were owners, and that's been going on for a long time.
35:21
SPEAKER_02: The the but the consolidators got in 10 or so, and then the brothers got involved with over 38.
35:28
SPEAKER_02: And then boom, that's that exploded.
35:31
SPEAKER_02: When when that when this bankruptcy happened, boom, it exploded.
35:35
SPEAKER_02: It's turned the market upside down.
35:37
SPEAKER_02: Some camps are going way over value, some are going under value.
35:41
SPEAKER_02: It's it's it's very interesting.
35:45
SPEAKER_04: Yeah.
35:46
SPEAKER_04: I was wondering if you could just jump into a little bit of that metric comment you made about valuation, some basic math or basic basic stuff that anyone listening would say, listen, I I really, if I did go to market, what what do I need to do to get a to to arrive at a number and maybe enlighten people to some of the things they should be thinking about or some of the methods by which you recommend they do it?
36:11
SPEAKER_02: I'll do that, but I want to start it by saying there's a range of these metrics that I'm gonna give you.
36:18
SPEAKER_02: And that range is dependent upon so many different variables that you I'm gonna give you the averages, but it's really hard because you need to know explicitly where your own program is, where your own camp is.
36:32
SPEAKER_02: And so some of the things that will change these metrics are what are the age of the campers?
36:37
SPEAKER_02: Are you top heavy with older kids or are you you got younger kids?
36:42
SPEAKER_02: Do you have do you are you consciously keeping that ratio steady so that you're always having younger kids, space for younger kids?
36:50
SPEAKER_02: Are you filling up with all your older kids and and and taking that two or three year wonder graft, or are you making sure that you bring any younger kids?
37:01
SPEAKER_02: Have you maintained the the property?
37:03
SPEAKER_02: Sometimes when you get older, you don't want to spend$100,000 on new tennis courts.
37:09
SPEAKER_02: So the valuation process has that happened, and so that'll have an impact on the on the ultimate purchase price.
37:19
SPEAKER_02: Staff, as you get older, you tend to hire more people to do the work you were doing when you were younger.
37:25
SPEAKER_02: And so your full-time staff is is a buyer going to come in and need six full-time staff members at$125,000 a year?
37:34
SPEAKER_02: Maybe not.
37:35
SPEAKER_02: And if they don't, that money is now available to the buyer, all having an impact on on the variable, on the prices, okay?
37:43
SPEAKER_02: Lots of different things.
37:45
SPEAKER_02: The the the what the property is like, what the real estate value is like.
37:50
SPEAKER_02: Even though when I do a valuation, this valuation is strictly the business, not the real estate.
37:57
SPEAKER_02: And I can that that's another topic that if you want, but that that's interesting.
38:01
SPEAKER_02: But the metrics, which is you asked me for.
38:04
SPEAKER_02: So there's there's three different metrics.
38:07
SPEAKER_02: One is what is the percentage of free cash.
38:11
SPEAKER_02: Free cash defined as the money that is available for camp operations, period.
38:20
SPEAKER_02: Not money to the directors, not money to investors, free cash.
38:26
SPEAKER_02: It's an eBITA, earnings before interest, depreciation, and taxes, amortization, okay, plus whatever money is used that is not directly related to operations.
38:39
SPEAKER_02: The the grossest example I'll give you of that is someone who spent fifty thousand dollars on their kids' college tuition and it was baked into camp financials.
38:51
SPEAKER_02: All right.
38:51
SPEAKER_02: So if you didn't find that$50,000, that's a huge amount of money that's available to a buyer.
39:00
SPEAKER_02: No one ever thought about that.
39:02
SPEAKER_02: Okay, I'm not even I'm not the RS, so I'm not even talking about whether that's legal or not.
39:08
SPEAKER_02: That's the point is you can have a lot of those expenses.
39:11
SPEAKER_02: It could be cars, which is terribly normal.
39:14
SPEAKER_02: You can go to Hawaii to interview three staff members and just happen to stay there for two weeks with your entire family.
39:21
SPEAKER_02: All sorts of things.
39:22
SPEAKER_02: So that free cash, yeah, typically about 30% of the revenue.
39:27
SPEAKER_02: That's about an average.
39:28
SPEAKER_02: Okay.
39:29
SPEAKER_02: So you can take your average, take 30%, and you multiply the free cash by an average of 9.8.
39:38
SPEAKER_02: Okay.
39:39
SPEAKER_02: The the brothers' bankruptcy, when you look at their appraisals, they did their value, they the the Israeli bondholders did their loan on a 10 times revenue, which was free cash.
39:55
SPEAKER_02: Okay.
39:56
SPEAKER_02: 10 times.
39:57
SPEAKER_02: That would that's a big number.
40:00
SPEAKER_02: And so the consolidators wouldn't even think of paying that.
40:04
SPEAKER_02: Okay.
40:05
SPEAKER_02: But now it happened, and it's so public that that is hopefully sent.
40:11
SPEAKER_02: Well, I don't know if it's hopeful if you're a buyer or a seller, it depends.
40:14
SPEAKER_02: If you're a right, if it's a seller, that's what you're gonna have to do.
40:18
SPEAKER_02: I mean, that's what you can do potentially.
40:22
SPEAKER_02: The simpler way is just a revenue multiplier, because everybody knows a revenue, you could write it down right now.
40:28
SPEAKER_02: And you could take your revenue, the average revenue multiplicate multiplier is 2.8.
40:34
SPEAKER_02: 2.9.
40:36
SPEAKER_02: So take your revenue, multiply it by 2.9.
40:39
SPEAKER_02: If everything is equal, your free cash will be 9.8 and your revenue will be 2.9, it'll come up close to the same valuation.
40:47
SPEAKER_02: Now, the ranges, however, of free cash was seven to thirteen.
40:54
SPEAKER_02: In one case, even substantially higher, but I throw that out because it's so unusual.
40:58
SPEAKER_02: But but seven to thirteen.
41:00
SPEAKER_02: The range of revenue multiplier is basically two to four.
41:05
SPEAKER_02: So within those ranges, you're potentially talking millions of dollars.
41:12
SPEAKER_02: So I mean, literally, if your revenue is three million and your multiplier is is is is three, you know, the difference between two and three is three million.
41:24
SPEAKER_03: Yeah.
41:25
SPEAKER_02: So big difference to be able to understand this.
41:30
SPEAKER_02: In all cases, though, you have to be able to prove that it's worth it.
41:35
SPEAKER_02: How does a buyer pay for it?
41:38
SPEAKER_02: That's another subject.
41:40
SPEAKER_02: But that but those numbers work.
41:43
SPEAKER_02: Those numbers work.
41:45
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43:08
SPEAKER_04: Are banks lending money to people for people to buy bank to buy camps exists?
43:12
SPEAKER_02: Yes.
43:12
SPEAKER_02: Yet to be determined, I don't think the bankruptcy is going to have an impact on that.
43:18
SPEAKER_04: Right.
43:18
SPEAKER_02: More is the interest rates they're just going up.
43:21
SPEAKER_02: The interest rates will have a big factor on all this.
43:25
SPEAKER_02: Huge factor.
43:25
SPEAKER_02: I mean, a couple of five years, six years ago when the interest rates were what, two percent?
43:30
SPEAKER_02: Whoa, you could buy a camp for a lot of money, borrow it, and the the payments were a quarter of or half of what you're paying now at seven and a half, eight percent.
43:43
SPEAKER_02: Huge impact.
43:44
SPEAKER_02: The the economics of the world is bigger, in my opinion, than the bankruptcy issues.
43:52
SPEAKER_04: Yeah, totally, totally.
43:54
SPEAKER_04: I, you know, I just yeah, the whole the whole global economic situation is, you know, glaring down on us with the luxury of camp and the expenses that families are currently going through and things like that.
44:07
SPEAKER_04: I think a lot of people are, if they haven't set their fees, are looking at that very closely as they get into planning for next season.
44:14
SPEAKER_04: I know a good number of the people who are in the industry, you know, set them early and and have already, you know, started enrollment in back in July kind of thing.
44:23
SPEAKER_04: So there's a lot of different variables in that for sure.
44:26
SPEAKER_04: But the economics of what's happening around the world are a huge factor for sure.
44:32
SPEAKER_04: And then there's this concept, which many people are familiar with is the the vendor.
44:38
SPEAKER_04: Take back the the the the the the arrangements where if the bank you know can support you not fully that you look for the seller to assist.
44:48
SPEAKER_04: Are you are you seeing in the landscape of just given potentially these prices where sellers know that they have to, they typically have to do a deal that requires that is just maybe you can comment on sort of where where you've seen things go in in the relationships that a a current owner has to, you know, make an arrangement like that with a buyer.
45:13
SPEAKER_02: Absolutely seen that.
45:14
SPEAKER_02: And to a certain extent, that's the only way a young buyer can can buy a cap at these values, right?
45:20
SPEAKER_02: Frankly, that's how this valuation of 10 times free cash has has worked.
45:26
SPEAKER_02: So let's suppose a uh seller calls me and says, Hey, I want a valuation.
45:31
SPEAKER_02: Okay, here's what here's what it is.
45:34
SPEAKER_02: And how do we get how does somebody buy buy this?
45:38
SPEAKER_02: Well, how many young kids, 28-year-olds, 30-year-old kids, can pay$10 million for a summer camp these days?
45:45
SPEAKER_02: Very few, unless their families are really wealthy.
45:48
SPEAKER_02: And if they're really wealthy, they got there for a reason.
45:50
SPEAKER_02: So no one's gonna, very few are paying cash.
45:54
SPEAKER_02: So banks will loan typically 60 to 80 percent of the value of their appraised value.
46:02
SPEAKER_02: And some banks will value just the land, some banks will value the land plus the business valuation, which is a big plus.
46:10
SPEAKER_02: Because if they if they add both together, then this is easy.
46:14
SPEAKER_02: But um now now I I I I I forgot where I was going.
46:19
SPEAKER_02: Sorry.
46:20
SPEAKER_04: No, that's okay.
46:20
SPEAKER_04: We're we're in the world of uh a vendor take back, just being able to so you you thank you.
46:26
SPEAKER_02: So you can edit that out, right?
46:28
SPEAKER_02: And so you can leave that in if you like.
46:30
SPEAKER_02: And so it's so typically a seller says, I don't want to take the risk, but I'll I'll ask a couple questions.
46:38
SPEAKER_02: Do you trust the people who's buying the camp?
46:41
SPEAKER_02: Generally, it's an alumni.
46:42
SPEAKER_02: I mean, it many times it's an alumnus.
46:44
SPEAKER_02: Yeah, I trust them.
46:45
SPEAKER_02: They've been working for me for five years, they can do this.
46:48
SPEAKER_02: Okay, so the typical transaction is the owner selling, owner financing of about 20% of the purchase price.
46:58
SPEAKER_02: Banks will own 60 to 70 to 80 percent, and typically the buyer has to come in with 10 to 20 percent of his own money or her own money somehow.
47:07
SPEAKER_02: So all most of my deals have been with owner financing, and it it's really a benefit to me, to the seller, because you're getting interest which is above and beyond the sale price, and you are being able to hold off on capital gains taxes until you actually get principal payments.
47:26
SPEAKER_02: So but but there's different very variations of owner financing, and so I mean it can get complicated.
47:33
SPEAKER_02: I I don't know.
47:33
SPEAKER_02: This is the you know the place to start talking about all that, but it's very, very prevalent owner financing.
47:40
SPEAKER_04: Okay, that's good for people to know.
47:43
SPEAKER_01: Yeah, I think it's interesting to know the amounts as well of the percentages of what's typical, and that's it's good to know that that still exists, like you said, Howie, of that that's still a thing.
47:55
SPEAKER_04: Yeah, and I know, I know, you know, I'm in Canada, you're in the States, the banking systems run differently, and and and you know, explaining, and I and I, you know, I when when we bought our overnight camp almost 25 years ago, trying to explain to a banker the camp industry and how how we take deposits and we don't deliver on service to many years, you know, months later, and how it works, like they looked at us like we had three heads.
48:24
SPEAKER_04: And so that's been it and and that exists everywhere.
48:26
SPEAKER_04: I mean, that has been everyone has that challenge.
48:29
SPEAKER_04: I think it's gotten obviously better.
48:31
SPEAKER_04: And I'm curious about you know, the results of the news of this summer, how that maybe changes the thought of a banker to to to to lend money.
48:39
SPEAKER_04: I I don't know, and and who knows banks are still loaning money.
48:43
SPEAKER_02: Banks are still loaning money, yeah.
48:44
SPEAKER_02: They're still loaning money.
48:45
SPEAKER_02: That's their business, they want to loan money.
48:47
SPEAKER_02: And and again, the bankruptcy happened because somebody ran off with money.
48:52
SPEAKER_02: It wasn't because the businesses weren't successful.
48:55
SPEAKER_02: Yeah, yeah, yeah.
48:56
SPEAKER_01: Yeah, I did think about that though this morning when I heard the news about the interest rates.
49:00
SPEAKER_01: I thought about this conversation, and I did just Google Canadian interest rates to see what yours were, how we there are much better at the current moment than ours.
49:08
SPEAKER_01: So that's interesting too.
49:10
SPEAKER_04: Yes, and our dollar sucks.
49:15
SPEAKER_04: But but the but yeah, so that's that's where we're at.
49:18
SPEAKER_04: That's really, really cool.
49:20
SPEAKER_04: You know, obviously, some of the news coming out of the bankruptcy is you know, these these very these new entities that are coming in to be the investors in camps, you know, big news about private equity and things like that.
49:34
SPEAKER_04: Is that, you know, when you know, in your in through your experience, you know, do you see, given the news of this summer, that there's going to be a lot of different players?
49:45
SPEAKER_04: You you you mentioned earlier in the discussion about, you know, people are just seeing this as a an investment, like it makes money.
49:50
SPEAKER_04: Like if you can prove it makes money, then people are looking to make money.
49:53
SPEAKER_04: It'll be really interesting to see over the next few years the makeup of the the owners in the industry because some are making a splash that we've never seen before.
50:05
SPEAKER_02: Well, that's interesting.
50:07
SPEAKER_02: And there's a couple other factors that are coming into play that I don't think anybody ever considered previously.
50:13
SPEAKER_02: The new generation of camp owners know this stuff, but 20, 30 years ago, it there wasn't such a thing.
50:20
SPEAKER_02: And those are accounting issues that are available for sellers and buyers.
50:27
SPEAKER_02: So, from a selling standpoint, a 1031 exchange could be a possibility if you plan far enough ahead.
50:34
SPEAKER_02: And I don't know if you know what that is, but you can you can transfer a like business into another business without paying any capital gains taxes.
50:44
SPEAKER_02: So, for example, let's suppose you're renting your land, and let's suppose your rental is a million dollars a year.
50:51
SPEAKER_02: You could transfer a million dollars of rental income into another rental business and and without having to pay the capital gains tax.
51:02
SPEAKER_02: Okay, so that can happen.
51:04
SPEAKER_02: Now, are people doing that?
51:06
SPEAKER_02: Some of the very sophisticated people are.
51:09
SPEAKER_02: Number two, there's what's called uh opportunity cost in the United States.
51:13
SPEAKER_02: I don't know about Canada, how there are some properties in certain parts of the country, cities, states, where if you put in a certain amount of money proportional to what the sales price is, and you invest that money in your property, in other words, building things, the capital improvements, when you go to sell 20 years later, you don't have to pay capital gains tax.
51:39
SPEAKER_02: That's huge because if the camp industry has proven that over 20 years you're gonna 10 times your initial investment, and if you don't have to pay any capital gains tax on that, okay, I'll promise to spend a million dollars on my new lodge for 20 years from now, having no capital gains tax.
52:00
SPEAKER_02: And the other thing is accelerated depreciation, which comes into play if if if if the allocations of the business are on depreciable items, you can accelerate that so it can offset costs substantially.
52:18
SPEAKER_02: In other words, if for example, if you're buying a camp for 10 million and you can depreciate that over five years, your first year's income could drop by 500,000 a year.
52:31
SPEAKER_02: Or whatever.
52:32
SPEAKER_02: Well, I I already figured out what I said, but what the number was.
52:36
SPEAKER_02: But it's accelerated depreciation.
52:38
SPEAKER_02: You ask your accountant about it and make sure that they understand that, and it's a huge benefit.
52:44
SPEAKER_02: Right.
52:44
SPEAKER_02: So some of the money guys are figuring all this out, and they're along with the revenue that we're we were able to increase revenue in the 80s, it's just the the revenue we're all making is so much more than than we ever dreamed, frankly.
53:02
SPEAKER_01: Is private equity new in camping, or we're just hearing about it for the first time?
53:06
SPEAKER_02: I think you're just is it new in camping?
53:10
SPEAKER_02: No, that's what I was trying to explain before.
53:12
SPEAKER_02: There are some business, some very high-profile folks that own summer camps, but not many.
53:19
SPEAKER_02: Now, private equity, the what I call the consolidators, to me, that's kind of private equity.
53:25
SPEAKER_04: Right.
53:26
SPEAKER_02: Even if you own 10 camps and you're running one of them, that's to me, that's equity, private equity.
53:32
SPEAKER_02: Yeah, it's becoming much more prevalent because they're able to borrow against their real estate and and and buy more.
53:40
SPEAKER_02: That's what the brothers did.
53:41
SPEAKER_02: They borrowed against real estate.
53:46
SPEAKER_02: Interesting.
53:47
SPEAKER_02: And again, it's just all my opinion.
53:49
SPEAKER_02: I mean, you know, fact check me.
53:51
SPEAKER_01: It's like we're not that official.
53:54
SPEAKER_02: We're not who are who are we?
53:57
SPEAKER_04: I just want to clarify this, you know.
53:59
SPEAKER_04: Listen, the opinions expressed, you know, that statement kind of thing.
54:03
SPEAKER_04: Please, please go to your local professional to gain, you know, more insight.
54:07
SPEAKER_04: Having said that, I think that, you know, the the the uniqueness of the camp industry, Robert and others like him across North America become these wonderful resources to at least jump into a conversation on the selling and buying.
54:24
SPEAKER_04: Because at the end of the day, you know, what do we know?
54:28
SPEAKER_04: We we know how to run camp.
54:29
SPEAKER_04: We know how to, you know, what what is our bread and butter?
54:32
SPEAKER_04: We a lot of us got into the, you know, the majority of people got in this business because of their love and passion for the deliverables of what we do year in and year out.
54:42
SPEAKER_02: I'm glad you're saying that for sure.
54:43
SPEAKER_02: Because, you know, I can I can sit here and talk the money part of it, but I I truly believe my real skill was being able to work with those kids and the staff members and and solve problems at camp.
54:54
SPEAKER_02: Yeah, totally, yeah, totally.
54:55
SPEAKER_04: I I think at the end of the day, we're addressing an important topic that's you know very relevant to you know what we like to do as part of the podcast.
55:03
SPEAKER_04: But, you know, you know, Kelly and I are in this business because of the communities we create and the cultures we, you know, we we work hard to maintain and create, you know, for so many of us are the the relationships that endure generationally, and that's what we do with.
55:21
SPEAKER_04: Hey, I'm a phys ed teacher.
55:22
SPEAKER_04: Like I, you know, I I could teach a lot of sports, but you know, it took me a while to learn how to run camp.
55:28
SPEAKER_04: And on the business side, I'm a I'm a I'm a lifelong learnable on learner on on that.
55:33
SPEAKER_04: And so for those of us, I'd like to still think people want to be in this business, generally speaking, because they have a passion for making a difference.
55:42
SPEAKER_04: And that's what we do.
55:43
SPEAKER_04: Having said that, the sophistication of our industry has gotten to a stage that we all have to be aware.
55:51
SPEAKER_04: And we often we have to have that as part of our, you know, toolbox.
55:56
SPEAKER_04: Uh, a part of our toolbox has to be understanding how to navigate this.
56:01
SPEAKER_04: Or, Kelly, like we do and we try to do, is to bring on the people and you know, give them opportunities to meet people like Robert who can answer questions, you know, that they're wondering like, how do I do this?
56:13
SPEAKER_04: And and I think that's ultimately, you know, I think the real value of having Robert on and having a resource that people can reach out to if they want.
56:23
SPEAKER_04: I don't know what your thoughts are on all that.
56:25
SPEAKER_01: Yeah, oh, I think to know how differently it can be done.
56:29
SPEAKER_01: There's so many similarities and how different it can be done.
56:32
SPEAKER_01: And I think also some people are more transparent about that than others.
56:37
SPEAKER_01: So it's nice to have like Robert, a third party, right?
56:40
SPEAKER_01: To be able to call and have a really honest conversation about what are my options or here's what I'm thinking, or how are people doing it, because there are many that it's one camp and it's one show.
56:51
SPEAKER_01: But like Robert said, I didn't know that you own three camps.
56:53
SPEAKER_01: I just had North Star in my head.
56:55
SPEAKER_01: So I think that's interesting that there are more people sometimes than you think that are involved in multiple camps, whether they are the face or seen with them or not.
57:07
SPEAKER_01: But I do think it's really good conversation for people listening to this to know that there are so many different ways to do it, but you don't always know that.
57:16
SPEAKER_01: Like you said, Howie, those parents might think their camp was just owned by the face that they know with that camp.
57:22
SPEAKER_01: And that isn't always, and many times is not the case.
57:25
SPEAKER_01: So it's it's good, I think, to talk about and for there to be conversations about that because it's not always talked about.
57:31
SPEAKER_02: Well, I think there's a difference between the owner and the and owner operator and just the operator of the camp.
57:39
SPEAKER_02: So the owner could be X, but the face of the camp could be Howie and Kelly.
57:46
SPEAKER_02: And so, you know, the families know you two.
57:49
SPEAKER_02: They they they might not even care who the owner is.
57:52
SPEAKER_02: No, they all they just want to know who's taking care of their kids.
57:55
SPEAKER_04: Exactly.
57:56
SPEAKER_04: So yeah, yeah, for sure.
57:58
SPEAKER_04: And I and I think it was really encouraging to learn, Robert, that the news of the summer is, you know, not having the negative effect of trust or things of that kind.
58:11
SPEAKER_04: Like that, that that becomes the biggest issue.
58:14
SPEAKER_04: I'm sure those camps that were specifically involved had to ask specific questions.
58:18
SPEAKER_04: But, you know, you know, I think it's if if consumer confidence remains high the way that we've enjoyed it, you know, in in despite of this, then you know, who we you know, we we're we're in a good spot.
58:31
SPEAKER_04: And that's in and you've got access to, you know, if you're feeling good about that, then that's something I think we can all lean on too, which is great.
58:40
SPEAKER_01: Yeah, it sounds like that that though that decision, that one decision by those bondholders is really oh what was the domino that fell to create that.
58:49
SPEAKER_01: So that's really interesting, and it could have been very different.
58:53
SPEAKER_02: Fascinating.
58:53
SPEAKER_02: I mean, the the 80 million dollars.
58:56
SPEAKER_02: Without that, there are camps that didn't all the money went into a different pile.
59:02
SPEAKER_02: And so and they're they're they're giving money out as the season goes on.
59:08
SPEAKER_02: But at the end of May, there wasn't any money to give out.
59:12
SPEAKER_02: So those guys had to make a quick decision, and they did, and and it paid off because of the 30 camps, if you take the valuations, the appraised value of all the 30 camps, and the sale price of all the 30 camps, it came out to 10 times.
59:30
SPEAKER_02: 10 times.
59:32
SPEAKER_02: And of the of the of the 20 camps that I have marked down, 11 of them went below appraised value.
59:40
SPEAKER_02: 11 out of 20, 6 went above the appraised value, and three went at appraised value, but the averages turned out to be just about 10 times.
59:52
SPEAKER_02: So, but over 50% went below the valuation, the below the appraised value.
59:58
SPEAKER_02: So you have to be very careful about the whole process.
1:00:03
SPEAKER_01: Very interesting.
1:00:04
SPEAKER_01: Robert, do you have any final thoughts, tips, words of wisdom to anyone listening, whether they're thinking about selling, buying, etc., just all all the years of experience you have.
1:00:17
SPEAKER_01: Any last things you want to share?
1:00:19
SPEAKER_02: Okay, sure.
1:00:19
SPEAKER_02: It takes time.
1:00:21
SPEAKER_02: So this is the time of year.
1:00:23
SPEAKER_02: September is when people are thinking, all right, that was a brutal summer.
1:00:27
SPEAKER_02: It was awesome, but you know what?
1:00:29
SPEAKER_02: Boom.
1:00:30
SPEAKER_02: It it takes an average of nine months from the time you you make the decision to sell to the time where you find a buyer and potentially close on your transaction.
1:00:43
SPEAKER_02: Some cases it takes two years.
1:00:46
SPEAKER_02: And so I worked in all the fastest I've ever done was three months.
1:00:51
SPEAKER_02: But the average is really like nine months.
1:00:53
SPEAKER_02: It takes time.
1:00:54
SPEAKER_02: So if you're thinking about it, think ahead because finding unless you have the right person already in play and all you have to do is finalize the paperwork, that's easy or easier.
1:01:07
SPEAKER_02: Right.
1:01:07
SPEAKER_02: You're looking for somebody at a price that you're comfortable with, that takes time.
1:01:12
SPEAKER_02: So think ahead.
1:01:13
SPEAKER_01: Okay, awesome.
1:01:15
SPEAKER_01: All right, are you ready to put on your vintage camp director hat and answer some of our rapid fire questions?
1:01:24
SPEAKER_02: Depends on what those questions are, but go for it.
1:01:26
SPEAKER_02: I'll trim it.
1:01:27
SPEAKER_01: Okay, okay.
1:01:28
SPEAKER_01: Here we go, Robert.
1:01:29
SPEAKER_01: Yeah, rapid fire.
1:01:30
SPEAKER_01: What was your favorite meal at camp?
1:01:33
SPEAKER_02: Oh, easy.
1:01:34
SPEAKER_02: Chicken Sunday night barbecue and Martha's coffee cake.
1:01:38
SPEAKER_01: Oh, okay.
1:01:39
SPEAKER_01: Is that still at North Star?
1:01:41
SPEAKER_01: Do we know?
1:01:41
SPEAKER_02: Still is, yeah.
1:01:44
SPEAKER_02: It better be, otherwise, you know, I'm going right in there.
1:01:46
SPEAKER_02: I live in the city.
1:01:48
SPEAKER_02: Yeah, but if I don't, you know, if it's not chicken barbecue, forget it.
1:01:51
SPEAKER_01: Maybe you should do a un, you know, a little stop in on a Sunday to make sure.
1:01:55
SPEAKER_02: I do.
1:01:56
SPEAKER_02: We live literally live that close.
1:01:57
SPEAKER_02: I I'm the old guy walking in all the time.
1:02:00
SPEAKER_01: I love that.
1:02:01
SPEAKER_01: Very cool.
1:02:02
SPEAKER_01: All right.
1:02:02
SPEAKER_01: That coffee cake sounds good right now.
1:02:04
SPEAKER_01: All right.
1:02:04
SPEAKER_01: If you could lead any program area at a camp, what would that program be?
1:02:09
SPEAKER_02: Okay.
1:02:10
SPEAKER_02: When I first started, that program was horseback riding, and I love to ride horses because I went to camp in Colorado.
1:02:16
SPEAKER_02: And but now, chess.
1:02:17
SPEAKER_02: I'll I'll teach chess and I'll play like five kids at a time, and they'll all beat me, but I'll I'll I'll go play.
1:02:23
SPEAKER_04: Wow, that's that's cool.
1:02:25
SPEAKER_01: Yeah, I like that.
1:02:26
SPEAKER_01: Some more's burnt or golden brown?
1:02:29
SPEAKER_02: Oh, burnt for sure.
1:02:30
SPEAKER_01: Oh, that's not what I accepted.
1:02:33
SPEAKER_02: Crispy.
1:02:34
SPEAKER_01: Okay.
1:02:34
SPEAKER_01: When you were a camper for that short stint, were you a camper that missed home and it made it hard to enjoy camp?
1:02:42
SPEAKER_01: Or were you like, peace out, family?
1:02:44
SPEAKER_01: I'm going to camp.
1:02:45
SPEAKER_02: No, I never, I never missed home.
1:02:47
SPEAKER_02: I went to camp in, like I said, in Colorado and loved it.
1:02:50
SPEAKER_02: And then when I then I with sports took took over until I started working at North Star.
1:02:56
SPEAKER_01: Okay.
1:02:57
SPEAKER_01: As a camp professional, where did you thrive?
1:02:59
SPEAKER_01: In the office, taking care of all the logistics, or out and about with the action?
1:03:04
SPEAKER_02: Oh, my my favorite was just working with the kids, obviously, is everybody.
1:03:08
SPEAKER_02: That's why you do this, of course, and staff and and see what's happening, you know.
1:03:13
SPEAKER_01: Okay.
1:03:14
SPEAKER_01: Last song or last question.
1:03:16
SPEAKER_01: Favorite camp song?
1:03:18
SPEAKER_01: Do you have one?
1:03:19
SPEAKER_02: Where did the children play?
1:03:21
SPEAKER_02: Kat Stevens and leaving on a jet plane, Peter, Paul, and Mary, who sang at North Star.
1:03:27
SPEAKER_02: Well, Peter and Paul sang at North Star.
1:03:29
SPEAKER_02: We got them to come.
1:03:31
SPEAKER_04: Amazing.
1:03:31
SPEAKER_04: Wow.
1:03:32
SPEAKER_04: Wonderful.
1:03:33
SPEAKER_04: Wonderful.
1:03:33
SPEAKER_01: All right.
1:03:34
SPEAKER_01: Thank you for that.
1:03:35
SPEAKER_04: You're welcome.
1:03:36
SPEAKER_04: Robert, this was long overdue and super special for Kelly and myself to have you kick off season seven and provide some wonderful insight into an area that you become kind of known for now.
1:03:49
SPEAKER_04: As apart from a wonderful ownership director career, you become a wonderful resource.
1:03:55
SPEAKER_04: And if people want to tap into that resource and ask you a few more questions and learn more, what's the best way to get a hold of you after listening to this?
1:04:04
SPEAKER_02: Well, they can call me.
1:04:06
SPEAKER_02: I I don't know.
1:04:07
SPEAKER_02: You know, is there an email?
1:04:09
SPEAKER_04: How about an email that reaches out to you to start the conversation?
1:04:12
SPEAKER_02: Of course.
1:04:12
SPEAKER_02: Do you want me to give that?
1:04:13
SPEAKER_02: I mean, that wasn't intending this to be a promotional thing for me.
1:04:16
SPEAKER_02: But Robert Leb, L E B 73, which is when I graduated from college at Gmail.
1:04:23
SPEAKER_02: Robert Leb73 at gmail.com.
1:04:27
SPEAKER_04: And and some people just may want a couple more stories about you know that I can do lots of things.
1:04:32
SPEAKER_04: And that that I know you love to do.
1:04:34
SPEAKER_04: So we encourage people to reach out.
1:04:36
SPEAKER_04: Robert is such a vault of super information and stories for sure.
1:04:42
SPEAKER_04: Kelly, how can people get a hold of you in during season seven?
1:04:46
SPEAKER_01: All right.
1:04:47
SPEAKER_01: Kelly with a Y at hidden pinesranch.com.
1:04:50
SPEAKER_01: Otherwise, in the show notes, I have my Instagram on there as well.
1:04:53
SPEAKER_01: What about you, Howie?
1:04:54
SPEAKER_04: Emails best, Howie at camprobinhood.ca.
1:04:58
SPEAKER_04: And looking for lots of suggestions for ideas.
1:05:01
SPEAKER_04: If you want to reach out, Kelly and I are exploring all kinds of new guests and some returning guests to make season seven a real special one.
1:05:10
SPEAKER_04: We definitely want to thank our sponsors at Camptivities for keeping the lights on and supporting what Kelly and I do.
1:05:16
SPEAKER_04: Thank them very much.
1:05:17
SPEAKER_04: Don't forget that you can find all of our show notes at gocamp.pro slash ownerspod.
1:05:22
SPEAKER_04: You can find the resources that we mentioned in this episode and lots of good stuff from our show and other amazing Go Camp Pro podcasts out there.
1:05:31
SPEAKER_04: Go check the website out.
1:05:32
SPEAKER_04: We really hope you enjoyed this kickoff to season seven.
1:05:36
SPEAKER_04: Thanks for listening, everyone, and we can't wait to join you again on the Camp Owners Podcast.
1:05:42
SPEAKER_04: Take care.
1:05:43
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1:05:46
SPEAKER_00: If you like what you heard, please leave us a review on Apple Music or wherever you listen to podcasts.
1:05:51
SPEAKER_00: And don't forget, you can find our show notes at gocamp.pro slash ownerspod.
1:05:56
SPEAKER_00: The Camp Owners Podcast is part of the GoCamp Pro Podcast Network.
1:05:59
SPEAKER_00: Find a podcast for Camp Pros of every age and stage at GoCamp.pro slash podcast.
1:06:06
SPEAKER_00: Hey Camp Pros.
1:06:07
SPEAKER_00: We love that our industry is built on sharing.
1:06:09
SPEAKER_00: In order to foster that spirit, if you've gotten even one good idea from a GoCamp Pro podcast, a masterclass, from the Summer Camp Pros group on Facebook, at a conference, or wherever else, we ask that you give credit where credit is due.
1:06:22
SPEAKER_00: That way, we can encourage Camp Pros to keep freely sharing their brilliant ideas and make the camp industry better.
1:06:28
SPEAKER_00: Thanks very much.