Underwriting a 42 site RV park means deciding how much of the seller's NOI to believe

Before anything else, the question is whether those twelve seasonal agreements are written and signed, and whether they include electric. At 2,800 a year that is 33,600, over a tenth of gross, and if it is a handshake with people who have parked a trailer on site for years, an operator is inheriting a social arrangement rather than a contract. It is also worth knowing what year each of those twelve started, because a seasonal rate set years ago and never raised is very different from one that moves with the market. Ask for the last three years of seasonal rate history in writing.

What is the difference between a full hookup site and water and electric only? Sewer connection at the pad, I assume?

Juniper, yes, full hookup means the site has a sewer inlet so the rig can dump without moving. That is why the pull throughs price higher.

Quill, the well is the line I would not skip. Output test, bacteria, and whether the state treats a well serving 42 sites as a public water system, which changes your testing and reporting duties and varies by state. In some states the moment you serve more than a set number of connections or people daily you fall into a regulated category with quarterly sampling and an operator certification. That is an annual expense line you do not have in your rebuild at all. Get the county or state drinking water office on the phone this week, not after closing.

A 6.2 cap in a rural lake town for something on a well with a four year old septic report is not a price worth paying, and that holds even for buyers who look at cheap rural properties all day.

The six cabins are a separate problem from the sites. Depending on the county they can sit in a different use class than transient camping, and in a lot of jurisdictions nightly cabin rental triggers lodging or occupancy tax that a seller may or may not have been collecting. If it has not been remitted, that liability question follows the entity on an equity purchase and sometimes follows the property, which depends on state law and belongs in front of a tax professional before closing. It is also worth checking whether the cabins were permitted at all. Owner built means owner built.

How did the broker get to 128k? Ask for the actual bank statements and the reservation software export, not the summary sheet. On the smaller listings I have looked at, the NOI line is usually gross minus whatever bills the owner happened to pay from the business account, with anything he paid personally sitting outside it. Your 38k manager add is probably right and I would add a payroll tax and workers comp load on top of it, because a manager couple is employees. That alone moves you a few more thousand down.

The twelve seasonals are the clause worth reading twice. In several states, once someone occupies the same site continuously past a threshold, often 30 days but it varies, they stop being a transient guest for eviction purposes and the regular process applies to remove them. Some states carve out RV parks explicitly, some do not, and the answer changes what a bad seasonal tenant costs. A local attorney should confirm which category those twelve fall into before that 33,600 gets underwritten as reliable. Separately, master metered electric on 30 full hookup sites with air conditioning running in August is not a rounding error. Twelve months of utility bills plotted out will tell the story. If July and August electric runs 3,500 a month, submetering is a capital project with a real payback, and whether submetered power can be billed to guests is regulated at the state level too.

The scary part is worth asking about directly. In February, when nobody's there, the loan payment still shows up. Does the summer cash cover eleven months of debt service with a pile left over from September, or does the shoulder season mean writing checks out of savings? Rebuilt NOI against debt at that price level doesn't leave much room to be wrong.

That question is the one a lender will ask first. On seasonal assets, underwriting typically looks at annual debt service coverage but also wants to see how the off season is funded, sometimes through an interest reserve or a required operating account balance. Ask the lender directly what coverage they want and whether they will size on the seller's trailing NOI or on a rebuilt, more conservative number, and get that answer in writing before spending money on a well test. Terms move, so confirm current requirements with the actual lender rather than assuming. If the loan sizes on the lower number, the loan amount may not support the contract price anyway, which makes any retrade conversation easier.

Retrade on the septic and the well and see what he says. If he blinks, that answers the question either way.

What breaks on a park like this is everything nobody puts on a P&L. Septic pumping schedule, the water heater in the bathhouse, and the wifi, which guests now treat as a utility and will hammer a property in reviews over. Budget wifi as a real line, a couple hundred a month plus equipment, because a lake town backhaul is often mediocre and the fix is expensive. Your 6,400 repairs line for 48 rentable units is fiction. Take a per unit annual number instead, and even at 400 a site that's 19k, with cabins running higher than sites because they have interiors. That's another 12k off your rebuild, which puts you closer to 72k than 84k. At 1.35M that is a 5.3 cap, and you already know what that means.