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NEW CENTRAL COAST RV PARK SELLS AT DISCOUNT DUE TO POOR MANAGMENT

The RV Park for sale in the city of Paso Robles, CA, San Luis Obispo County sold on October 1, 2003 for $1,780,000.  Vince Reynolds and Norman Sangalang of MHRV Advisors represented both parties in this transaction.
 
The RV park was built in 2000 and consist of 80 full hook-up spaces and a ranch style 3 bedroom 2 bath home.  The property is situated on 5.65 acres serviced by well water and septic.  The park is ideally located just off Highway 101 with excellent highway visibility. Amenities at the park include a pool, recreation room, horseshoes, and laundry room.  The property also receives $1,000 per month from a long term cell tower lease.

The buyer assumed the existing SBA RV park financing of $1.2 million at 5.75% amortized over 25 years and secondary financing carried by the Sellers of $150,000 at 6%.
 
The park suffered from mismanagement, ownership disputes and under capitalization in it’s first two years of operation.  It is also because of these problems that accurate profit and loss statements were not available.  The sales price was reduced to reflect this lack of information.  There was a SBA loan in place at 5.75% fully amortized over 25 years and secondary financing carried by the Sellers of $150,000 at 6% which allowed the Buyers to leverage close to 80% of the value which is unusually high for RV Parks with income problems.  This combination should give the new owners a tremendous opportunity to turn the property around an see excellent returns in the near future.

“The strength of the location and visibility of the Paso Robles RV Ranch allowed the property to remain operational without any serious attention given to the advertising or marketing efforts. The new owners are experienced park operators and are looking at capitalizing on the property mismanagement.," said Norman.
 
Vince Reynolds also commented, “The sellers purchased the property just under two years ago with the best intentions but, encountered partnership and management problems immediately.  They were trying to hold on to the remaining equity they had, while the income was declining every month.  Were it not for the strength of its Highway 101 location the property would have gone into foreclosure.   We were able to negotiate a transaction in such a way that the Sellers preserved most of their equity while still providing the Buyer with good existing cash flow and clear upside potential.”

RV Parks for sale in CA, San Luis Obispo County, Paso Robles
  

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