The seasonal contracts I bought were month to month in every way that mattered

The letter is the part that stings. I'm about to do my first rent increase on a house and I've been reading everything about how to deliver it, and everyone who's done this says the same thing you just said, a rate change from a stranger reads completely differently than one from someone who's shaken your hand. Did you meet any of the 38 before you sent it?

74% of underwritten revenue in year one and you still covered debt service. That tells me your basis did more work than your model did, which is roughly what happens to all of us the first year we own a new asset type.

My version was 22 units, not a campground, but the same shape. Seller was the super, lived on site, and I replaced him with a management company. Turnover went from 12% to 41% in twelve months.

Question from the building side. When those 19 pulled out, did their sites need work before you could resell them? Seasonal guests build things. Decks, sheds, gravel they laid themselves, sometimes a hard plumbed connection that isn't to code. On the construction jobs I've been on, the removal cost of somebody else's improvements is never zero.

The rate move is defensible and it still cost you 31k. That's the whole lesson right there. In small rural markets I don't think you get to be right on paper, you get to be right with the twelve people who talk to each other at the mailbox.

Trying to get the sequence straight in my head. You read the 30 day clause during diligence, you wrote it down, and then you underwrote 90% retention. What was the argument you made to yourself at the time? I ask because I do that exact thing, I find the risk and then let three years of history talk me out of it, and I'd like to know what the inside of that decision felt like for someone who caught it.

Orchard's holdback idea is the thing I'm writing down. I'm still planning a first purchase and it hadn't occurred to me that a soft revenue line could be handled in the contract rather than in the spreadsheet.

Every unit teaches something and yours taught 31k worth. I had a small building where the seller mowed the lawn himself and I didn't put a landscaping line in the budget at all, because the historicals didn't have one. 4,800 a year I found out about in April.

So the boring path would have been buy it, change nothing, run the same potluck, and raise rates in year two. Is that actually available to a new owner, or do the seasonals sniff out the change no matter what you do?

I'm mid problem on something adjacent so this is timely. Half my nightly revenue at a small park I'm operating comes from a 90 day summer window and I've been assuming I can push shoulder season rates. After reading this I think what I'll actually get is fewer bookings and the same revenue. Fathom, did nightly rate hold at your park or did you leave it alone too?

What's a pro rata refund in this context? I think I follow it but I want to be sure I'm not guessing.

From a capital allocation view the interesting number isn't the 31k, it's that you needed a basis low enough to absorb a 26% revenue miss and you had one. Most of the RV park deals crossing my desk are priced as though the operator will hit underwriting in year one. When I ask what happens at 75% of projected revenue the answer is usually a pause.

This is the first post that made me understand why people say the operator is the asset in hospitality. The land didn't change. The buildings didn't change. Half the revenue changed because a different person was standing there.

I've run a service business five years and the potluck thing is real and it's also a liability. If your revenue depends on the owner being personally beloved, the business isn't transferable and you'll take the same haircut when you sell that you just took when you bought. At some point somebody has to build a park where the reason people stay is the bathhouse and the wifi and the sites, and then the relationship is gravy instead of the foundation.

Thatch, that cuts both ways though. The transferable version competes on amenities and amenities cost capital every year. The beloved owner version runs on almost nothing until the owner leaves.

Dumb question I'd have been embarrassed to ask elsewhere. Why does a seasonal guest get a pro rata refund at all? If I sign up for a season and leave in July, why isn't the money the park's money? Is that a state law thing or just how these contracts got written?

I've been stuck in analysis for a year and threads like this are why. The clause was findable, the retention history was findable, and the thing that actually mattered, that the owner was the product, isn't in any document. I don't know how you diligence that except by sitting in the park for a weekend and talking to people, which is exactly the kind of unquantifiable work I keep avoiding.