A large number of the parks that I am finding for sale are not in metropolitan areas or within 45 minutes of a metro area. There are quite a few that are in towns of 50,000 or so. Do you ever run test ads in these communities initially to see if there is a demand for park vacancies or do you just pass on them?
50,000 populations are fine, as long as they’re the “right” as long as the fundamentals are correct (SF prices high, apartment rents high, diversity of employment, etc.). We always run test ads on any park we buy. If you don’t, you’re crazy. That would be like Frito bringing out a new dip without market testing.
Yes, always run test ads. But not at the expense of making an offer and locking-up a good deal. Make lots and lots of offers - at prices that work for you. When you’ve got a willing seller signed-up at a reasonable price, then you run your test ads. Buy the ‘30 Days of Diligence’ book off this website.Good luck,-jl-
Frank & Jefferson, Could you give me a breakdown on resources that you use for statistics on jobs and employers in the area you test in?
I first go to wikipedia to get a macro overview of what makes the city or town tick. Then I Google up “Top 10 Employers in _______” and see if anything comes up. Then I call the Chamber of Commerce and see what they say the top employers are, as well as any new employers coming to town or shutting down.We like the employers to be “recession-proof” (hospitals, colleges, schools, Federal and State government) or diversified (many different industries with roughly the same employees per plant). We hate “One-horse towns” where all the employers are in the same industry (coal, oil, etc.) or when there is one employer with 4,000 jobs and the next largest has 50.
Frank, What about a Canadian border town? I’m looking at a park up there but there is not a whole lot of employment. It’s mainly tourism. There is also agriculture there so there might be illegals to rent to. I don’t know how to research that market. Might be a good RV park conversion but I don’t want to get into the seasonal RV park business.
None of those are the type of markets we invest in. We are only comfortable with real employers, real affordable housing demand and real populations. You’re biggest danger in a location like that is going to be exit strategy – very few people are going to want to invest there, and you might be stuck with that park for life. RV is a tough business and we don’t get involved in it except when we’re stuck with RV lots.