Latest / The Investor Shed Podcast / From $145K to $925K: RV Park Turnaround & Refinance Story | Investor Shed

Transcript

From $145K to $925K: RV Park Turnaround & Refinance Story | Investor Shed · The Investor Shed Podcast

• Nick & Jeremy: Welcome back to the Investor Shed podcast, everybody. I'm so glad you're here. I'm Nick Beverage here with my co-host, Jeremy Kitchen. How are you? Nicholas Beverage. I'm doing so well. How are you today? Pretty fantastic. Yeah. Pretty good. Pretty good. I'm running on a high. Oh, what's got you going on a high today? Well, yesterday I ran 14 and a half miles. Did you do Bloomsday? No, I just I ran with RD. He's training for ⁓ a marathon. Nice. And then I'm just hurting my legs. You're hurting your legs? I'm hurting the legs. Okay. Yeah, they hurt. Yeah. They're fine though. Friday, RV Park refinanced. Congratulations. Hey, that's really good. Thank you. That's very good. Today, I'm gonna run you guys through ⁓ what it was like taking an asset that nobody wanted for $145,000. and getting it to appraise for nine hundred and twenty five thousand dollars and having an exit to where now everything is on autopilot. And I get a meaningful amount of cash flow until I don't know until we have problems again. But until you're from. Yeah. But for now, until it's not in a real state, right. Got this business that is performing. Yeah. It's had a couple of profitable tax years and I was able to get that just a conventional refinance. Okay, so just kind of a backtrack on this one obviously if this is your first time listening to the podcast We're gonna go into the thing exactly what the project is This has been a a few years in the making right a few years. How many years have you had this? Almost well, not me totally but you were in a partnership with it at the beginning We're like your brother owned this deal first came across in 2018. Okay Maybe 2017 sure it might have been 2017 actually. Okay, so almost nine years Almost nine years ago, ⁓ an agent in my office at Keller Williams back in the day, he was sitting next to me in a ⁓ meeting and he knew I flipped houses and stuff. ⁓ I knew at the time, my brother asked me for, ⁓ he's like, can you find me something in the Silver Valley that I can work on? He had a lot of ambition too at the time and just wanted to get a rental like me out there. ⁓ Or a second just accomplished his first. And this agent who worked out there in the Silver Valley mostly, he had this RV park. And I've seen it on the MLS before. It was in the mid-100s. It was listed for like around 140, 145. Something like that. And this was 2017-ish? Yeah, it was about 2017. And the problem with this RV park was it was just, it was vacant. There's the pedestals and stuff, but there was something wrong with the Like the actual sewage out there. Yeah. Yeah, like they had to get a new tank or something I didn't really know exactly what the issue was, but he told me he was just like hey by the way If you know anyone looking for an RV park I've got this one I've had for a while, but it was just approved by the Panhandle Health District. Okay for this 3,000 gallon ⁓ Tank that they have underground sure So now he can be run as an RV party because before you couldn't actually you had to make more improvements to the park But it's like it's officially somebody can have people move in gotcha He's like it needs like a bath house, you know bathrooms laundry that they take care. They took care of the tank So it was only a proof. Okay, the tank was done and it was approved by the city that said like yes You can run this as an RV park. Yeah, cool. Okay, the by the panhandle help sure sure. Yeah Yeah, so the tank was already underground. It was approved. There were still some work needed with this park, but I'm like, ⁓ that sounds good. And I'm like, so are you guys going to up the price now? ⁓ And he's like, no. I'm like, really? I'm like, I'll write you an offer. so without even consulting my brother who was going to buy it, I decided I was going to buy this thing. I wrote up an offer in his name because that's the kind of agent I am. And I submitted it. Don't don't take my advice, everybody. All the time. I do some weird things. Legality aside, Nick, if Sean didn't buy it, Nick would have like we would have. Yeah. Well, I quickly I quickly it was a serious. Why I didn't put my name on it. Sure. Yeah. But I just you know, it was fresh in my mind that my brother wanted a new project to work on. Yeah. And here's this 23 space unit RV part. on five acres off the highway in Osborne. ⁓ It's OK. You know, there's power lines and stuff right nearby. ⁓ But it is adjacent to the Trail of the Coeur d'Alene. It's a nice bike trail. Yeah, there's a creek right there that's adjacent to it. ⁓ It's but it's just this kind of run down parking lot. Yeah. With old pedestals, half of them are broken, it seemed like. ⁓ And there was missing ⁓ sewer hookups. On each side each side just had power and water Okay, uh and then the sewer, uh, the the sewage tank was a you 3 000 gallon tank where people could dump their sewage but also the Infrastructure like there was a septic and a previous, um bath house That was there but the building was gone. Yeah, it was just a big one At some point somebody tore down the building or took it somewhere else or something like that. Yeah ⁓ So anyway, I got another contract for 145,000. We ⁓ forged my brother's signatures and I said, hey, got you a deal. There's an RV park. He's like, no way. Really? I'm like, yeah. And instantly, as I was putting it together, I was just like, why aren't I part of this? Yeah. I'm like, I found the deal. Right. I got another contract. I just put it my brother's name. But I'm like, we also flipped houses together. Yeah. And I told him, I asked him, I'm like, actually, do you want to partner on this? Yeah. ⁓ And he said no. ⁓ that's like the one time I've ever heard him say no. He's usually a yes man. He's usually a yes man, but he's like, no, I'll do it. Yeah. And I was just like, ⁓ fine. But we were we were kind of playing ⁓ competitively like who can get more rentals? Sure. So he was like, use because I had just gotten like two rentals out in the valley and he had one and we were flipping houses before that. We just finally were getting in the rental game. Yeah. Yeah. For the most part. long-term rentals with the money that we were making off so you wanted to be equal with you on a number of X rentals basically well he would have beat me with 23 you know I would consider that one property a lot of potential revenue sources from your property it's commercial commercial yeah it's and it was a completely different piece sure now how much experience did I have with RV parks how much experience of my brother have with RV parks you may be asking absolutely zero nothing I've never even owned an RV. Yep. Sean's never owned an RV. don't know what this world is like. We don't really necessarily know what this world is like. What kind of income could be had with a property like this? We just kind of guessed that it should be a lot. There's 23. There's got to be people that want to use it. And we were just young and ambitious and didn't know what we were doing. It just got into it. Yeah. So anyway, he he got it with a hard money loan through somebody in Spokane. um And uh, was he he with zero money down. He got 100 of it funded with with uh with a loan It's pretty good because they saw the value too. Sure. This hard money lender's like wow You got an rv park Under contract for 145. Yeah, we'll give you everything you need Um, and I think the payments ended up being around around two grand a month. Yeah or so it was like 12 interest Interest only payments make sense, know higher higher interest payment because there's zero down payment like they they flex their schedules and did their knobs like yeah, this is the Risk we're willing to give for this basically. Yep. Cool. Okay. So for the next You know what? might have been 2018. I'm sorry. Well, either it's just was 2018 because for the next two or so years I from what I heard because I wasn't really involved too. Yeah. Yeah, you were part of the project from what I was hearing from Sean was kind of a nightmare. ⁓ And he doesn't... he usually exaggerates how great things are. Yeah, yeah, yeah. But they had a lot... he never did end up building the bath house. Okay. Instead, he used that collateral... like he just had people move into it off Facebook or whatever. And then a lot of people weren't paying. It kind of became a dumping site for homeless people or whatever. Sure. ⁓ From what I heard, it was just really bad. So your brother was self managing it self managing it and also I think trying to get a long term his long term property manager to kind of help sure manage it but it was it was a disaster for a couple of years. Yeah. Yeah, but ⁓ He was able to convince that hard money lender to give him another second lien With that and pull out another hundred grand. Okay to use as play money to work on other projects. Sure. ⁓ which ⁓ Didn't work out well with with Sean Anyway, couple years later, we're hunting and he's telling me about this RV park and how the loans matured. He owes about $2.65. Yeah. ⁓ And it's about it's probably going to go back to the lenders at this point because he hasn't been able to turn a profit at all. Sure. And or he said, unless you want to partner with me somehow, help me out. Try to figure out how you want my money when it's a problem. see. Yeah. And so I said, OK, I think I would like to I'd like to get into this again, even though it's a couple of years later and already had a second lean on it and everything. Yeah. Like the equity, like he wouldn't play with equity somewhere else. He's gone. Equity's gone. Right. And you still decided like, yeah, this is something that like sounds secure enough to like go into. Well, I was super optimistic. Right. Right. We'll tell the story, but I'm just wondering what your mindset was. My mindset was like, said no. OK. And now he wants you because he needs you. Right. Which is fine. Yeah. My brother. Yeah. Yeah. You love him. You'll you'll help your family. I get it. Yeah. We go back and forth on needing help with things. Sure. And but what I saw was here's an opportunity to get into a 23 unit RV park. Yeah. Still needs a lot of work. He never built out the bathrooms, by the way. Never built out the bathhouse. or laundry or anything. So obviously it's going to have questionable people there. Sure. That, know, a park needs to have certain amenities and bathrooms are helpful. Places to shower. It's true. Do your laundry, that kind of stuff. So OK, so I was like, OK, I got to raise at least 265,000. Yeah, I didn't have the money in my account. I went out to a friend and asked for some money. and said, hey, would you be interested in ⁓ loaning me on this? Give me a couple of years to figure it out. ⁓ And ⁓ I'll pay you 50 grand in fees. You just don't get any payments or anything. But the moment we start getting revenue, ⁓ I'll share half the... Half the revenue with you. Okay in order to help pay that on that loan if needed So so you paying back the loan amount plus 50 grand basically not like a month. Yeah, no no monthly He's just gonna invest you know, 265 grand. Okay, so he helped me take off the lot it basically from the heart or He gave me the money to buy it. Yeah gave you the money to buy it And then I formed a new LLC that I split with my brother 50-50. Okay, so it became 50 partners REI RV LLC REI RV LLC that's a lot of letters with a DBA of Big Creek RV Park So I was able to find the Big Creek RV Park. He never actually took that. He it was still branded Yeah, the old name that was 20 years. Mm-hmm But it was still in somebody else's name. Gotcha. So I had to I I had to do some Paperwork doctoring sure to get this legit because my I knew that what the goal was we had to build out the RV park so that it was functional, bathhouse, laundry, ⁓ and then build a revenue ⁓ where we have to have a couple of years of tax history to be able to refinance it into some sort of longer term debt. Okay. And get out of hard money payments. Because hard money payments are a short term thing. They're not a final solution for sure. It's just interest only, it's a high interest rate, and it's very hard to... Can't you can't still cash flow off these kind of things, but it's not a long-term solution, right? And I knew okay Here's what we have to do We have to have to build this thing out and then we have to figure out a way for it to make money for a couple of years And then we can refinance it people out of it. Yeah, make sense. Yeah Easier said than done Running a new business you've ever done hard. Yeah, so immediately ⁓ I've After you know, didn't do a whole lot of due diligence I just kind of trusted what my brother was saying about the park and that yeah things are fine and it turns out not Not a lot of it was fine. Right? Not a lot of the pedestals worked. Oh, okay the There were a lot of a lot of little issues but long story short I I had to use a lot of debt a lot of my own cash to build out this, you know, we got it we got initially funded for 265 for our new basis cost. Sure. Yeah. It's fresh, basically. Yeah. And then over the course of another couple of years took a couple of years, I know, but I was also trying to do everything at once. So this is not your main focus. Like you were our plan was with all the extra cash that my brother and I were making on flips and builds. we would dump at least like half of the cash that we made into the RV park to try to do a lot of the improvements with cash. Turned out that we didn't have a lot of extra cash and we were breaking even in that direction, right? like, no, no, we just simply, I took out way too much. Yeah. I had too many things going on and I just did not have enough cash flow to meet the demands of all the overhead I had. Sure. Because just a year after that or so I was spending 90 grand a month and only bringing in like 20 grand a month sure the extra funds were not there to work on the RV park, right? But I but we were still slowly building it out with that. Mm-hmm. I I think over time I put about two hundred and ten thousand dollars into improvements ⁓ Improving we built out the bath house. So that's on top of on top of your 265 basis. Yes, put another 210 in yes, cool. So we're at 475 ish right now. That's correct. Okay, I'm just getting numbers in my head for people listening, right? Not including all the Overhead costs to just maintain those payments and that was all your money not Sean's money then right that was the second half. Yeah, put it in a person 110,000 Sean did help like he framed out the I think he framed out and did some signing work on the bath house because we built out a really nice Laundry and bathroom facility with four very nice bathrooms. They're very nice 180A compliant. We had a nice storage closet for all the toilet paper and soap and DVRs or whatever they call them for the security cameras. Sure. So it's a legit setup like your IT. Yeah, a little IT setup. ⁓ We had a laundry facility with two sets of coin operated laundry. ⁓ And once we had everything built out and we did a lot of improvements to the asphalt and ⁓ some of the earthwork. A lot of the electrical pedestals and stuff. It was a lot of money a lot of time Yeah, once we finally got it all set. This was probably about 2020 Late 2022 early 2023. Mm-hmm We we told our property manager that our long-term property manager that was going to remotely Manage it from a distance. It's ready to go We're done. So so he took over phone calls And you know the website we had a website that directed phone calls to him and put it on craigslist and facebook here and there is a big creek rv.com Yeah, big creek rv big creek dot u us or something. I will pull it up later. But um, I forgot what the website is. Yeah, I think that's a good website. But yeah, yeah. So anyway, um We told our property manager is ready to go. Um over the next eight months to a year, uh complete disaster. Okay, uh Apparently, it's really hard to manage an RV park from a distance. Interesting. Not having somebody there on site was hard because the moment he had somebody move in, there were homeless people breaking in the bathrooms and stuff and squatting and causing damage. it just like and it forced that one person just to take it. We don't want be around. Yeah. Yeah. This is gross. Yeah. OK. And so we kept having the, you know, issues with homeless people and stuff. Yeah. ⁓ There's not a whole lot of homeless people in that county, but they found that RV park. Right. They a spot. this is a nice new facility. Thank you. So I got a call one day ⁓ from a man who was moving out of his Osborne house that he's in his 70s and him and his wife are going to live in their RV. And he asked, could I be your manager and live there? And I will manage everything day to day. Yeah. ⁓ He left me that voicemail and I didn't call him back. I was too busy. Yeah, but then somebody on my team said hey I spoke to this guy really he wants to be your manager. Yeah, the big crick RV park He thinks he can turn around like okay. I'll call him and I met with him And I just got a good gut feeling about him. That's the best. Yeah, I just got a good gut feeling ⁓ That he just seemed like enough of a hard ass. Mm-hmm. And this was gonna be his new life mission Okay was just managing this park Yeah, and and his wife was gonna clean the bathrooms every day which was very much needed. Yeah. Yeah, so I agreed and we we we agreed on the contingency of Here's what my expectations are of you if you want to live here for free and and do this these things need to happen every single day a month week Whatever it is like here's your requirements. Yeah, so so I came up I said, let's let let's meet again. I'm gonna come up with an agreement ⁓ that you can think over and see see which See if you want to do this. Yeah. And so I put together a one page management agreement. Maybe it was two pages. Sure. But it essentially just said you're going to act in the best interest of this park if you're going to live here for free. But you will not make any money until you have at least 40 percent of this park occupied. OK. You'll make up four hundred dollars extra a month. If you can get at least four hundred ⁓ if you can get and that's between 40 and 60 percent occupied. If you can get between 60. and 80 occupied, we'll give you an extra $800 a month. And you're renting about by the month, right? These are monthly? Not at first. Not at first. It was a combination of both short term and long term. So I'll get into that. But first, we wanted to put an agreement together with this manager. Yeah. And then if we're at 80 percent or more occupied, then I'll pay you a thousand dollars a month. OK, those are the three tiers. Yeah. Or if you want, you can just simply take no pay, but ⁓ like, I think it was like 10 % of the net proceeds or something like that. Yeah. Which would have been about the same. Sure. He's and I said those two options circle one and then you know, I expect you he said he had a plow on a side by side. Make sure you keep the park plowed when it's snowy. Yeah. And ⁓ make sure you deal with all tenant conflicts. Yep. Collect rent if needed. Whenever we have you know, do your new onboard have people sign leases that I will provide. Yeah. Keep keep the bathrooms clean. Blah, blah, blah, blah. Yeah. You know, just manage the like the management of the park, but at least not just so vague, like manage the park. But there were, hey, as long as you do these tasks, we're not going to have any issues. Sure. And these tasks were spelt out. Yeah. So it wasn't too vague. That's good. And it was still all kept on one or two sheets of paper. Yeah. And they agreed. They circled. Let's do the simpler one with the occupancy. Sure. ⁓ You know and so they moved into the park and then I I Started I got a hold of somebody else who had an RV park nearby And he was friendly enough to kind of provide me with what? Platform he uses to try to get look like bookings sure and stuff like like an Airbnb type of thing Yeah, yeah, it's called res nexus. Okay, and it was meant for like RV parks and hotel rooms and stuff cool and then this this company will work with you one-on-one, they'll assign you somebody to kind of build out your RV park and like, here's what you should have. You should have a map. Okay, so I went to Fiverr and I'm like, can you create me a map that looks like this with the legend? So I found somebody on Fiverr to actually build out the park like a healthy looking map that you would see at a campground. And then I had to go to each site and make sure, okay, this one had 20 amp and 30, 20 amp and 30, 20 amp. This one has. 20 and 30 and 50s. And then these are pull through sites and I had to get everything kind of mapped out exactly what each space provided ⁓ so that we can have proper bookings online. Yeah, so you can book in the right spot and that makes sense. So that actually took like a month to set up. Yeah. Of like full time, like we're going to get this park online. Yeah. And available to book online like an Airbnb. That makes sense. And then at the same time I said, to my manager if anybody wants to is somebody just drives by or calls at first I'm going to get all the phone calls but eventually I'll give you the phone calls but for now I'm going to get all the calls. Okay. So if somebody is inquiring online that they see my number they call me. Does it go directly to your cell phone number back then? Yep. Directly to myself. Yeah. Yeah. Funnel it nowadays to be like call this number and then it calls your phone from a number like oh this is a RV park lead right you can but I was desperate to get this park working because it was already over two years in the making. And another two years if you consider Sean's effort of I've got to get this park to make money. Yeah, it's been way too long. It's been years. you know Gotta find a way to make money on this gotta find a way to make money and and I figured out that the way to make money was to Stop skipping steps. Yeah, and to just work your ass off. That's and Because I was trying to skip steps before you know trying to have somebody else remotely manage it or somebody else, you know And Sean, the same thing, skipping steps by not having the proper amenities at the park, those kind of things. Like we want a legit business with real income, you gotta be legit too and put in the legit amount of work that it needs. So I I buckled down and I just focused a full month of like six hours a day, I was like devoting to this and making sure that everything that I knew about the park, went online, anything that I didn't know about the park, I went and found out about the park, put online, built out systems and actually followed the step where we started. And then we started marketing it. OK, started blasting it on Facebook. They put up signs around town with like, if you want to move in. So we actually had to do a big marketing campaign to to attract people. Yeah. And then I made the decision that we weren't going to do any background checks. If they can afford to give us the money up front, then they can move in. Okay. And it worked. Okay. And because before my long-term property manager was doing background checks and credit checks on everybody. Yeah. And was, was not approving like anybody. Okay. And I just made the decision that this park was, going to have some bad apples. Sure. Yeah. And Bill will deal with that because he's also a hard ass, but we're not going to, we're not going to, that's the step that we're going to skip to get the most amount of people in there. Yeah, because people that don't have slightly shady backgrounds or bad credit probably aren't going to be living at that park. Sure. ⁓ So that's that's the one questionable thing that I decided that we're going to do. Is that still in play today? Yes. ⁓ wow. OK. And if we ever have issues with people, we kick them out. So we're pretty firm about that. If they don't pay rent, they get an eviction notice. Easy peasy. ⁓ So so we the people learn how to behave. Yeah. by we're setting examples with you're the standard of like we're setting it's standards that we don't let shit fly right like if you got a you got a bad history but you come into this park you change your attitude yeah you fix it young man because what we're offering too is very affordable yeah living ⁓ we we are the cheapest in the whole county probably the all of north idaho okay ⁓ of like rv spaces sure To live at now. We don't have sewer hooked up So you have to go to our bathrooms or something or dump your sewage in to the tank, right? Which is a hassle So there's there's some sacrificing there other parks are similar. Yeah to that ⁓ But but we decided that we weren't going to discriminate based off credit or or background As long as can make payments Yeah, and we were just going to judge people by how they behaved in the park got if they were an issue They're gonna call the cops Like have you to evict anybody? ⁓ yeah. Okay. What's that? Like do they just say like move your RV? Well, fortunately, I don't have to deal with it. Yeah, does yeah, and we don't have it We don't have this issue very often sure maybe maybe we've only had ⁓ three evictions in the last three years, okay ⁓ So like do they tow your RV away or something? Yeah, he'll call he'll call he has the number to the tow Yeah, tow truck took the call and said get this off our property. They're not paying Yeah, I was just thinking it's like it's different than a house like you being evicted from a house means you have to vacate the house Yeah, you being evicted from an RV park means you have to vacate with your house Yeah, and the agreement the lease agreement that that people sign when they come with us it's spelt out that you know Here here are the penalties. Here's the grounds for this Here are the penalties for not behaving right for being too loud at a certain time or being obnoxious or blah blah blah or stealing or anything shady that we feel is not appropriate sure Those kind of things. Not paying your rent. So anyway, it's still not a fabulous park. It's not wonderful. It's not beautiful, but it makes money. Yeah. And it works. And people are... a lot of people are grateful to live there. Yeah. Which is not something I expected, but they are because it's affordable to live in a very unaffordable world. You know. Yeah. So anyway, I spent... spent a lot of time and money kind of getting it to that point and it didn't actually start turning a profit monthly until early 2024. So in 2024 we had our first full year and the income that it produced, the gross income was around $75,000. That's pretty good. And and a lot of it was eaten up with interest payments But what I knew that when a bank looks at this a couple years after the from now Yeah, which was this year. Yeah They are gonna any interest payments. They're not gonna consider because it's gonna be a new loan, right? So as long as we can keep all the other expenses down Yeah, and and try to net the certain amount at each month It's gonna be worth a certain amount of money. Sure if that does that make sense? Yeah. Yeah. No, I get it You gotta just hit your levels, right? Yeah ⁓ so at this point you're getting a little bit of cash flow off it. You're getting some gross revenue ⁓ were you starting to pay back the original? 265 yet or was that still kind of like once we start turning profit? So we just let pretty much everything just sit in the account actually the first the first year 2024 ⁓ I use probably half the cash flow personally. Yeah ⁓ just just to help substitute some other things and I was finally getting out of the bad my bad financial situation. Yeah. Yeah And so for the first half of the year, I had to borrow quite a bit of money and it kept track of it all. but the second half of the year, I didn't really have to. And then all the 2025, I don't think I took any. Cool. ⁓ I did a little in 2026, but that's. That's fine. Yeah, I can put it back. Yeah. What if and when I need to. But we don't need a whole margin trainings with it. All kinds of stuff. But everything. But we don't need to just we don't need this massive, you know, we don't need 40 grand sitting in the account. You're actually not supposed to have a lot of money sitting in a business account like that. we had to do owner distribution. Yeah. And fortunately, I can start that 210 that I initially invested. I get I'm getting all that back before Sean gets paid anything. Sure. So I'm hammering away at that first. OK. And he understands and agrees. Sure. So it could be it could be quite a few years before Sean sees anything. We're still partners. Okay. Yeah. offered to buy him out a few years ago and a couple years ago and he said no, okay But I did say you're not gonna see anything until I get paid What does my cash back and I don't mean a dog on him, but like what does he contribute to the partnership now? It seems like you're running. He offers to do things, but he doesn't have to sure We have somebody on site managing it and then I do the book Shawn's not a book guy. No, no, yeah So here's like does he come do renovations or like like what his know is his role in the partnership other than like bringing the asset back to you which you could have just put in your name at the beginning that's a really good question and the honest answer is just nothing at all he's an owner yeah that's okay that's okay he offered he offered me to be a partner yeah and so i'm honoring what we agreed on years ago which is okay i'm gonna come in and fix things yeah and we will be partners That's the agreement. And there's nothing wrong with that. Like, there's literally nothing wrong with that. Like Alex Ramosi does the same thing with his businesses. He's like, once you get to a certain point, I'll come in and I'll partner with you, but I'll help you grow and I'll just take part of the revenue. You're doing that. Right. So that there is, you know, there's there's a fine balance between what's greedy and what's fair. Sure. And ⁓ what's fair to me is what we agreed on. I would agree. And what we agreed on is that I will come and help. fix this park up for 50-50. And that's it. And that's what we agreed on. I tried to ask him if I can buy him out. Sure. know, because I knew at this point he doesn't need to do anything. He's just an owner. So, yeah, is he getting a free ticket? I don't know. He offered me. It doesn't matter. He offered it to me years ago. Yeah. A 50 % stake to help fix the problem. Right. And I'm happy to say that I finally did it. Yeah. But boy was I off a couple of years. Yeah, that's OK. But it's finally as of Friday. It's in the bag. Like as far as we toy 25, we had made over I think one hundred and seventeen thousand dollars. That's pretty good. And had and the only big expense that we had was I installed a playground. OK, so what I wanted was to make this park feel more like a parking lot, more than just a parking lot, but also like since there's bunch of kids out there, I want them to also have something. So I invested like $6,700 or so. Yeah. Taking out this field of weeds and overgrown area and installing a playset. OK. You know, it was like a Costco playset. wasn't massive. It wasn't. But it also wasn't like a cheap little home set. Right. Right. That's awesome. Yeah. And but it helped with the appraisal value, too. Yeah, I bet it did. ⁓ So anyway, ⁓ yeah, 2025, we did better. OK. And also those coin operated laundry that I bought, they've already paid for themselves. They were four thousand dollars. Yeah. We've made close to five thousand dollars so far in quarters and like two years in a little over two years. Yeah, that's really good. Not bad. Yeah. Any asset you can get that pays for itself in two years is like pretty decent. Yes. Yeah. Yeah, so I'm happy to say that the ⁓ yeah Yeah, so it's nice, you know, I don't know how much Exactly water and electricity usage ⁓ good thing with water. It's a flat fee out there. Sure The electricity I do pay for yeah Or the park pays for yeah. Yeah So there's that but it's just nice that an amenity that you offer also has an additional little revenue source Yeah Where we can justify if if these things break down? In another year or two, it's it's not such a hassle having to replace them because they already paid for themselves sure and so it's not like a total revenue source, but it's a it's a How would you say a sustainable source sure of Revenue to replace. Yeah. Yeah when needed love it So not like I can't count on you know for grand every other year just to go spend willy-nilly No, but I can probably now count on if you know for a grand every other year to replace What's there sure? Yeah, it's self-sustaining at that point. Yeah, totally. So it helps with the catbacks. Yeah. Yeah. Okay. Now going back to the numbers, original loan 265, you put like 210 into it. So again, like 475 plus minus, right? That's that's kind of your number. You just refied for the 900. Yeah. So here's here's what happened. We probably spent closer to 500,000. Yeah. All in with the new basis acquisition when I partnered with them and improvements. Yeah. So probably are all in our cost basis of around 500 grand. Yeah. In appraise for nine hundred and twenty five thousand dollars. It's incredible. A few weeks ago. ⁓ Did you get cash out of this refinance? No. But what happened was I had to roll a lot of bad negative equity from other projects. This guy that loan let me three hundred to sixty or sorry, two sixty five. Yeah. He actually lent me seven hundred grand. OK. And then he died. Yeah. Okay. I remember. Yeah. Yeah. But I've been working with his family on paying back everything with interest and this some of that rolled in from other projects that went bad. Okay. Went into this and I'm happy to say that that loan is paid off now. The 700,000 as of today. That is so recorded and funded on Friday and they can go pick up their check today. I love it. And that was five years in the making. Yeah. Then getting the rest of the money back with with all the with interest and payment with interest. Yeah. Yeah, that's really good Yeah, cool. So that kind of feels so good man. Yeah, wait. Yeah, that's the last of the two million dollar loss 1.85 million. Sorry, I exaggerate a little bit. Oh, it's 1.85 million. Yeah, lost Okay, that was the last of the carryover into other projects. How does that feel? Um, it feels it feels good. It feels like um, you know, I was always skeptical if this would work or not because I've never gotten an actual commercial loan. Sure. This is a legit, I went to my bank. Here's another funny story. when I went, so I've been losing on my taxes, like 400 grand a year for the last few years. Yeah. Because my, my accountant, my CPA is taking all those huge losses and not just taking on year one, but he's able to spread it out over time to where I don't have to pay any taxes for a while. Yeah. Instead of just Here's all your huge losses in one year and that's it. You're rolling and you're done. Smart enough to know, hey, let's take this over time. You got a few years of not paying taxes. Thanks to you learning a bunch and losing all this. to your education. ⁓ But because of that, ⁓ when I go and try to get a loan anywhere, ⁓ if it's not purely based off my credit and also they want to see my taxes. They get a little gun shy. They're like, you lost $400,000 last year? On paper? Like, yeah. Yeah. On paper. Here's the funny thing. Numerica Credit Union. They're a big bank. Yeah. In the Northwest. Yeah. I wouldn't say big bank. I would say they're average sized credit union. Average sized credit union. I applied for, I told them about my situation and how I've been working hard for this. particular LLC to show good tax history so I can get a normal loan through SBA. ⁓ Now here's what I found out. ⁓ In the first nine months of the park going well, I turned off the short-term rentals and we just went straight up long-term month to month. That's what I thought. But I didn't realize with an SBA loan on a campground like this, If it's just long long-term monthly rentals, they won't do it. Oh So it needs some short and long term. So I was expecting for the last couple of years to get an SBA loan Okay And then I found out as I was applying a couple months ago Yeah, actually this isn't gonna qualify because you don't do short term anymore it's just interesting and that's one of the caveats of the SBA For an RV park. It has a short RV park loan. Okay. It has to have the short term as well Interesting. Yeah, so but numeric is like Well, we could probably look at it as just a commercial loan. Okay. Yes, a normal commercial loan and they quoted me a rate. They're like Assuming that everything works out like six and a half percent interest Would be the the interest rate. Yeah and amortized over 25 years. Okay, and it would be a Five year fixed with the 10-year balloon. Okay So this is kind of common in the commercial world if you're getting a commercial note and you're so used to just regular mortgages on houses. This is different with a house, you know, you got a 30 year loan and that's it. And it's usually fixed for 30 years. Amortized over 30 years. Amortized over 30 years. Your final payment will pay off the final. With the commercial loan, now there's a lot of moving pieces to the terms. So again, 25 year amortization means I'm going to be making payments as if I'm paying it off in 25 years. Sure. In 10 years the the loan balloons like you've got to refinance it or pay it off within 10 years. Oh and in five years that interest rate might change right? Probably is what they're Yeah, it's it's adjustable after five years Yeah, so very common but just something to keep keep in mind. Yeah, but I thought hey terms sound pretty good because right now I'm paying, you know, 10 % Yeah, sounds good to me So I explained my situation. She said I think we're gonna be able to work just fine on this Okay, I said but they asked for all my taxes. Mm-hmm and everything They wanted to see at which I was expecting them to see my taxes on the RV park But they're like we want to see all your business taxes because we have to get a global look at your whole situation Yeah, it makes sense. I'm like, okay Great. Cool. Cool. Cool. Here you go. And then the next morning she calls and she's like Yeah, we're not gonna be able to do this alone at all No, she's like, sorry, there's just no way. Yeah. She's like, I apologize. you show the loss on paper like the thousand dollars or whatever? Yeah, they're like they're just not they're not going to go for it. They're not going for this at all. Sorry. Yeah. Try try, you know, try someone else or try hard money loan. would make sense, right? Like, I mean, they have to do their own due diligence and value these properties and the person behind them as they should. So so what would you do in that situation? Well, I mean, what would I do? I definitely wouldn't like stop looking. I would go talk to somebody else. Yeah. You know what I told her? why not? ⁓ yeah. I said, come on. I'm like, you guys are like, you guys know me. I've been thinking with you forever. I'm like, isn't it better to have these big losses going what I went through and have great credit showing that in a situation like I've had, I was responsible enough to pay everyone back? Yeah. Like I wouldn't have good credit if I didn't pay everyone back. I'm just taking the losses over time because of these flips due to this situation. Right. With this, you know, basically partners that embezzled a bunch of money and just caused this big spiral of a bunch of projects to lose money. Yeah. And what did I do instead of going bankrupt or walking away from all these loans? Everyone got paid. Yeah. I just took all the losses. Me personally, I sold a bunch of properties, sold a bunch of rentals. and all those losses ⁓ I'm able to spread out over time with my CPA. Like, you guys seriously, you don't see that as a good thing? Not a bad thing? And she's like, when you put it like that, that makes sense. She's like, I'll ask them, I'll get back to you. She calls me back later that evening ⁓ and she's like, yeah, they're good. Wow. They're like, that makes a lot of sense. That like never works by the way. know, I was just like what? Usually like the higher ups like, I mean the people below them are just asking or just like, no, like these are our criteria and you don't fit, just tell them to get screwed, you know? Yeah, but it was funny how, yeah, I wasn't expecting, I was just kind of like, I wasn't anticipating her to change, them to change their minds. like upsetting like, you know, their commercial, they know what they're doing. Yeah. But it was funny for me just to give a little bit of pushback and like, why aren't you guys thinking about this differently? Yeah. Like, isn't this a good thing? Yeah. That I went through all this. Isn't this show that I've got a little character and that I will take care of the loans because I've been through this massive issue before. ⁓ And she took that back and they're just like, yeah, yeah, yeah. She went up to upper management and she's like, yelled at me. I don't think I yelled at her, but I was just like, I don't see why you guys are looking at it that way. And it was just interesting that, know, this is not some small little rinky-dink bank. This is a bigger credit union for the Northwest, or like you said, average credit union. But it was just funny how sometimes people stop too early. And you can just be a little relentless and just say, try again. And sometimes you get the results you want. And it worked. That's incredible. I said, we did the opposite approach when we got our HELOC. know, like we were going to go through our mortgage companies. like, yeah, of course we can. And then they're like, just kidding. And then my personal bank was like, yeah, we'll give you like 20 grand. And then I went to my other personal bank, they're like, how about 170? And I'm like, well, that's the number I want. Completely different scenarios on completely different banks, that's super cool. You would never think in a million years that would work. Bank have criteria and you're just like, well, the customer's always right. I guess we gotta just them the loan. Can you ask again? Okay, they're fine. Like what? Anyway, and it worked out. That's awesome. And then here we are. That was about a month ago. OK. And and we closed and we had a praise. So so let's look at the numbers. Yeah. This RV park went from nobody wanting it on the market as one hundred forty five thousand dollars. Yep. Came with some baggage. Yeah, it came with a little bit of issues. All in five hundred grand of other people's money. Some of my money, whatever. At a price for nine hundred and twenty five thousand. They gave us a loan for $630,000. Okay. And it was almost just enough to pay for all the fees, the appraisals and everything and pay off both loans that I had against it. Cool. So I paid off the first hard money loan. I eventually got another hard money loan on this by the way, for $160,000 at some point to help build out the bath house. Like a second lien on that type of thing? Okay. Well, it actually a first lien. Okay. Because the first guy never put a lien on it. ⁓ okay. It was just, here's the crypto. ⁓ yeah. and then pay me back whenever. With 50,000. Yeah. With 50,000. Okay. That was kind of the deal. Cool. So it was a long journey, but it worked out. Everyone got paid. Yeah. My managers are still there. The hard money lenders are off. So now the payment's about $4,400. Okay. Our total income annually or monthly is around nine grand. Okay. Sometimes it's more. Yeah, so minus your fees for your park manager Running the place restocks. You're like, you're sounds like and here's here's what I do And I'm not exaggerating for the last 18 months I either I will drop by them or they'll come by when they go to Costco now They have a card and they know what to get a Costco with the toilet paper and paper towels and floor cleaner and stuff Yeah, do they have your Costco card? ⁓ They have their own Costco card, but they have the debit card. So they have a debit card for the business. It's in its own LLC, obviously, with its own bank account. And Costco takes that debit And I'm able to easily do the books very fast, but they collect almost all the cash. There's only two tenants that pay with a debit card that I kind of manage and text with here and there when they're like, hey, can you use this debit card instead? I honestly probably put about an hour and a half worth of work into this every month. most of that is counting money. Yeah. I have all this cash in envelopes and I just update my Resnexus ⁓ program. Even though it no longer I'm not booking people online, but I still like it for organizing all the money. Yeah. And it still gives all the reports and occupancy reports and everything. if you've got an RV park out there, Resnexus is pretty cool. Yeah. easy to use, it's very affordable. you're no longer booking people online? people that doesn't happen anymore? No, but it's still I keep track of everything online. Sure. And I can run their payments online. ⁓ But they my property managers deal with all the incoming people. OK. ⁓ I gave them my the phone. I transferred the phone number. Yeah. So now any and all calls go to them. I for the last year and a half, I. I've been putting, like I said, about an hour to an hour and a half worth of work into this every month. Okay. And it makes more than any of my other rentals. What is your like current occupancy rate? It's steadily around 90%. Okay, great. Yeah. Interesting. Yep. Yeah. Once we hit 90 % or over 80%, sorry, we've never been below 80%. So they've they've and Over time after the first year, I also bumped all the rents by $45. Which helped a lot. You know, it brought in an extra few hundred dollars a month, extra few thousand dollars a year. We'll probably bump the rents again next year maybe if it's needed. But it's still very affordable. And when I did bump the rents, I also bumped the property manager's salary. I gave them an extra 10 % too, which was $1,100. So now they make $1,100 a month. Assuming that we have over 80 % sure I find that fascinating that you don't do online bookings and you're at like 80 90 percent occupancy Well, it's because people just live there month to month sure Yeah, and we only have maybe maybe once a month or so somebody falls off and somebody comes back on yeah Maybe somebody's late and then we also we charge late fees Yeah, but we are late fees are a big part of our income but like even like with what I'm thinking and you don't have to use this of course But like if you have an online booking system people will book online It doesn't have to be all of them, of course, but like or you can get a waitlist or a queue going up like, yeah, I them handle it. Okay. Well, that's fine. Yeah, I just know like with my website and my business, like, like people find my website that I've never talked to. Yeah. And they go book through it. And I'm like, whatever that is, is working. Yeah. Never worked with you. Never talked to you in my life, but you somehow found me and found your way into my website and booked a shoot. Yep. So, so if, if my chance, if I'll, if the park went down, to like 50 % occupancy for whatever reason, we'd probably have to start marketing again and trying to book online and that kind of stuff. But it's just, it's already kind of a hot commodity in general. And I just let them deal with it. And I think it's mostly word of mouth for people to live out there. Do you have security cameras and stuff out there? I do. Cool, okay. and I added another one over time. Nice. And it all runs through Starlink. Do have any vending machines out there? No, I've always considered it. Yeah, but I just don't know if I want the hassle to make an extra 40 bucks Whatever they're like, I'm thinking of like there's like two different ways you can do it like a vending machine I see all these things on my instagram. That's like start a vending machine business ⁓ there's also the things in the airport like just walk in bring your credit card Beep your credit card on the way out for whatever supplies you take and make it just like chips and non-perishables Or ibuprofen, know what? mean just like little things like that where you can put a 30 markup on some of this stuff and I don't know. It's a good idea. don't have to think about that, but that's on my mind. Yeah. Like having things where they don't have to leave. You know, in the little laundry centers, like that to have a vending machine because we have a video camera in there if anyone tried to disturb it. can't. Right. For now, it's just it's just a simple park. And I have considered that. I just don't know. Maybe maybe one day we'll have a vending machine. I said, like the, I like the, then the airport stuff where you just go in and you just like, you know, like it's got the little kiosk, there's nobody manning it. Whatever you take though, it just like beeps your car as you leave. ⁓ great, automatic. And then you can like have that all automatically. Like when you need to restock, it'll tell you and stuff. It's seems to be pretty automatic. Yeah. If I can find an affordable soda machine or something, I think it starts small with soda machine or something like that. ⁓ might be, might be useful. I just don't know. ⁓ Don't know if it's worth investing a couple thousand, a few thousand in a machine to spit out, you know. I don't know how much these make. I should look into it, I guess. Instead of just. Well, if your occupancy is 80 to 90 percent, these are why I'm asking these questions. Like you've got people there. Yeah, there's there's probably people don't want to leave to go get things. Yes. Yeah, there's probably 25 people at least. Not 25 people. There's there's probably spots. Yeah. There's probably 40 people or so that live out there on that parking lot. Yeah. Even like some little candy and stuff for the kids or juice boxes or something for the kids like parents would pay that but I don't know man Maybe yeah, don't think about it too hard. This is me. Just like like wonder what else you could do to make this thing like really cool All right, that's cool, man, I'm really proud of you I'm proud of like ⁓ we're we're winning in just a minute, but I know no no I believe you with the vending machine It would be fun and and I just I just think about like is it gonna be worth the long-term maintenance of that thing, right? And that's where I get questioned like is it it worth keeping up on that or should we just worry focus on the park? Sure ⁓ But like because I I love having The ability to not have to go out there ever sure I think a lot of problems with the I think you'll have more problems with the washer and dryer than you would with a vending machine Haven't had one yet, then I don't think you would with a vending machine. Yeah that aside though, I do want to say like Congratulations first off. ⁓ you. I'm like getting through this thing. I know this has been a Quite a couple years in the making. Yeah. And there are some times there where I just put it on the market, tried to sell it as it was just not working out. Yeah. I mean, I came out and tried to sell it a couple of years ago. Yeah. I was trying to sell for like $5.99. Yeah. And then just a couple of years later, prices for $9.25 with a little bit of work. Yeah. Well, that's the work you put into it, though. So mean, like, I think you were offering a fair price on the thing. Yeah. wanted it. Yeah. Nobody wanted it. But also, like you, you made something out of nothing. Well, some of the infrastructure was there and the zoning was there. Right, but like it was a problem. had homeless problems. had, you it was stressful. Yeah, you had money problems. All these things happened and you overcame all of them. And I think that's really cool for you, even with your bank, how you're just like, please reconsider. Yeah. You got to be relentless, man. Yeah, it helps. Yeah, it helps with life. That's so good. A of people are going to want to tell you no. But if you want to yes, you just say, want to yes here. What do I get? What do we do to do? Okay, so future site question for you Three years from now. Where do you see that park? ⁓ You know, I I hope It's almost exactly the same. Yeah, everything's running like exactly how you'd want it. I hope that the ⁓ my Managers are still healthy. Yeah, I was gonna say do you have a backup plan if they like? Someone like them. I mean, that's where the real work is gonna come in. How can I replace people like that? Yeah, like where she's okay cleaning the bathrooms every day. And he's a hard ass and also has a side by side with plow and that kind of stuff. ⁓ Can I mirror that? I don't know. I might have to bring the side by side with the plow and have it there for the next manager one day. ⁓ So I'm just going to be willing to adapt. But if this park can be running exactly the way it is right now, three years from now, that's... One of the best case scenarios in my head. Yeah. Just keep this gravy train running. ⁓ Because the cool thing is that we don't have to maintain much. Yeah. All these RVs are though they're RVs. Yeah. They maintain them. we we got to maintain bathrooms, ⁓ which are mostly tile. OK. We have had to swap the eventually the ⁓ curtains. We had to swap all the shower curtains because they were just getting too nasty. Yeah. ⁓ so I might have to swap some shower curtains again. Yeah, people are dirty and they work out there. It's a working country for sure Yeah, there's gonna be a little bit of catbacks here and there but I think three years from now there's not gonna be much. Yeah Yeah, so they have showers out in the bathrooms then. ⁓ yeah. Yeah, that's good. Yeah, they all have showers. Cool. cool, man. That's a cool thing I'm so proud of you for like I'm just doing that. What a what a crazy leap of faith that you have like I know this thing can work It's gonna take some work to make it work, but we can get there We can get there. can get there. Yeah. Cool. But it wasn't like it was not it was hard most of the time. Right. Only when all the systems are in place is when things finally become easy. That's pretty good advice to be honest for any business you're running. Yeah. Becomes a lot easier with systems. good. Systems, systems, systems. Yeah. All right, everybody. Hopefully you enjoyed it. We'll catch you later. You can say bye too. I will. I wasn't sure if you're gonna keep talking. We'll see you next week on the Investorship Podcast. Take care, we love you. Love you too, bye bye. Bye bye.