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Welcome to the RV Park Mastery Podcast, where you will learn the correct way to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around and operate RV parks. Your host is the 5th largest owner of RV and mobile home parks in the United States, Frank Rolfe.
It's perfectly natural to be scared of new things. It's perfectly alright to be afraid of signing up to buy an RV park because you've never done one before. But you got to power through that fear because if you don't power through it, there's no way you'll ever own an RV park which which might change your financial destiny. This is Frank Rolfe with the RV Park Mastery Podcast. We're going to talk about ways to warm up your cold feet when looking at a deal. Now, the first thing you have to know is there has no reason to be scared in signing a contract as long as that contract has a due diligence provision and a financing contingency. That's the way these contracts are structured. The first step should lead to no anxiety because you always have the ability to get out. You're not really committing to buy the RV park, you're committing to buy the RV park only if through further study and due diligence and the ability to obtain a loan, you then want to go forward with it. It's not much of a commitment. The fear should come in a contract when you actually go to close on it.
That's when it's more reasonable to have lots of anxiety, is when you actually have to finally put up the money and sign the loan documents to close. But the very act of signing that initial agreement should be a zero worry situation. Now, that being said, make sure in your contract you have a due diligence provision that allows you to get out for any reason you want within a certain period of time, and a financing contingency, which means if you can't get a loan, you again can drop the deal within a certain period of time. I would also make sure that any contract you ever signed for RV park does not have buyer specific performance, which means you have to buy it even if you don't want to buy it. If you didn't cancel during financing or due diligence. Now, I've never seen it happen, but who knows, Maybe you could have a stroke and go into a coma and you therefore miss those dates. But most of the time when it comes to buying an RV park, the one moment that you should not be filled with jitters is when it comes simply to signing up the deal.
And by the time you get to the scary part, which is the actual commitment to go in there and have to put down your money that you work so hard to accumulate and sign with that loan, by the time those steps happen, you know a lot about the property. You have totally changed your gut feel. Suddenly, the jitters go away as you learn more about the property and what it could mean to you as the buyer, you've had time to explore to make sure you verified everything regarding the infrastructure, the location, and all those type of items. After lender scrutiny and most certainly the appraisal on the property, it's all affirmation that you're making a smart decision. So then it doesn't seem as scary, right? So when it comes time to actually do the scary part, you're not scared. You were scared initially because you don't know much about the property. You don't know if you can get a loan. You don't even know if your estimates of value are valid. But by the time it comes to actually do the scary part and close on it, you'll have a much better feeling.
And your gut feeling will overcome whatever jitters you had to get you to go forward with that deal. Now, another thing you can do is you can always seek other input from people regarding deals. I go over deals with people constantly to help them understand whether the deal, at least in my own opinion, looks good or looks bad, or maybe help them figure out what the price should be or how to renegotiate it. Our industry is not in a vacuum. There's a lot of people in your life you can run it by, maybe friends or maybe family. There may be other experts that you deal with for other items who can look at things and tell you, okay, yeah, that deal makes sense. Or, oh, wait, you missed something here. So once you sign up for that deal, it isn't like you have to make that decision completely on your own and that you are fully accountable. No, you can get further input from others to help you make that decision. And that also includes, of course, the appraisal that they do on the property and the banker's opinion of the appraisal. Now, if you use seller financing, you won't get those two, I will admit, but at the same time, you will have the ability to get deals, often at a lower cost and more attractive interest rates, lower down payments.
So we love seller financing, but that doesn't mean, even in the absence of the appraisal, in the absence of the bank's review of the appraisal, that you are out of business when you have seller financing. We love seller financing. And we would certainly, again, not drop a deal because of seller financing simply because we don't get that other affirmation. If you really want to, you can pay yourself for an appraisal, even if you have a seller deal. But another thing to consider when it comes to having cold feet on buying an RV park is the Jeff Bezos regret minimization theory. You may have read recently that Jeff Bezos, who's now reflecting on his career as he gets older and he's not really in the day to day activities of Amazon like he used to be, he's now reflecting on life, trying to help guide others to be successful here. And he now describes what led him to start Amazon. What you call the regret minimization theory. Now what is that? According to Bezos, he had this nice cushy job on Wall Street and yet he walked that job. He was the youngest vice president ever of whatever firm he was at.
He abandoned all that to start an online used book store. It sounds ridiculous, what a crazy concept. But he just had this hankering to give it a go because the Internet was new and he knows, he knew that used books, often there was no tracking, no one even knew what books they had. And he loved books. So he put it all together and thought he would start a thing called Amazon to sell used books. That was where it came from. And he was willing to risk his day job to get that going. Because under his theory, you go back to when you're 80 years old, looking back on your life, figure out what opportunities you missed that you're extremely upset about and what you want to do. Under his theory of regret minimization is not have those moments where you look back on your deathbed or close to your deathbed at 80 years old and say, oh man, why didn't I do this other thing? That's how he started Amazon, because he thought that if he didn't do it, he would always regret it. Even if Amazon had failed. He said he could have gone back and gotten another job on Wall Street, but if he hadn't given it a shot, he would have always wondered, what if he had?
And that's the same on buying that RV park you're looking at. If you don't give it a shot, you're probably going to violate his rule because you're going to look back at 80 and say, Man, I wish I'd done that. That might have had a significant change in my life and my lifestyle. Also, it's imperative right now that most people simply reflect on the fact you've got to have multiple streams of income. America right now is extremely unstable. I've never seen it like it is today. This is not the America that I grew up with. That's so fast moving. Entire industries are being destroyed through the advent of AI and just the change in the American consumer. Even our political stance in the nation has never been more haphazard. So as a result, you really got to have something stable to hang your hat on beyond just your day job. And when it comes to having multiple streams of income, RV parks are probably should be at the top of your list because they're an income property and they produce regular, predictable monthly streams of cash. And that could help be used as a defensive mechanism against loss of a day job, reduction of income in a day job, or just any of the massive potholes and hurdles that we all face every day today.
The bottom line to it all is when you're feeling concerned, when you have this fear of signing up that contract to buy the RV park, I fully understand that. Anyone would. But you got to power through it. That's not the moment to be afraid. And by the time it comes to the moment where you should have jitters, you won't, because your gut instinct will tell you what to do. This is Frank Rolfe with the RV Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.