[00:00:00] Speaker A: Welcome to RV Park Boss, a podcast for RV park owners. I'm your host, Jason Lafferty, and this is a show where we dive deep in the challenges and rewards of park ownership and some funny stories along the way. This podcast is sponsored by RV Park Pros. 78% of all RV parks are self managed mom and pop operations. And aside from location, there's strong marketing, guest experience, proactive management, all which are keys to success and profitability for any park. If you're trying to keep up with this all to yourself, there is a better way. RV Park Pros is a park property management system that helps you maximize your occupancy and profits while optimizing your guest experience and retention, all without having to be involved in the day to day. To learn more about how we can streamline your park's operations, go to rvparkpros.com again, that's rv parkpros.com and today's RV park boss is Nicholas De Leon and he is with Leon Real Estate Partners. Welcome to the show, sir. How are we doing today?
[00:00:52] Speaker B: Great. Thanks for having me on, Jason.
[00:00:54] Speaker A: Yeah, yeah. I appreciate your time. I've been following you since Bob and Vera had you on as a host, talking about your parks and the different asset classes you're in. So. And I've been coming to your Dallas commercial real estate meetup pretty often as well. So good to have you here.
[00:01:11] Speaker B: Thank you.
[00:01:12] Speaker A: Yeah. So I want to kick it off with a question like I always do, you invest across multiple asset classes, including RV parks. So what made RV parks compelling enough to earn a place alongside apartments and warehouses? That's in your portfolio?
[00:01:27] Speaker B: Yeah, so it's, it's an interesting space. As your listeners know.
One of the main things I really like about it and what we focus on when we buy these RV parks is cash flow.
So we generally try to target a double digit cash on cash.
Very hard to do that with apartments, very hard to do that with warehouses.
The other thing we really, really like is, and I can tell you a story, there's a lot of mom and pop owners.
You know, it's, it's very kind of grassroots. So we bought an RV park in the Carolinas over 400 pads.
[00:02:08] Speaker A: Oh, wow.
[00:02:08] Speaker B: And this was a mom and pop owner. You know, it was owned by this one family for about 30 years.
[00:02:16] Speaker A: Wow.
[00:02:16] Speaker B: And you know the value that you can add when it's mom and pop, because it's not, it's not optimized. Right. They're not, they're not kind of pushing things out on The Internet, Right. And a lot of value. Right. So kind of the story there was, it was a mom and pop owner, my operating partner, his father was actually cold calling to source deals. Right. So he's also mom and pop. Right. So he was cold calling and supposedly the property was already in the contract to be sold to one of the big RV park operators.
And they were kind of a pain to deal with because they're a big institution. And they said, you know what guys, we're kind of in contract or maybe they had an loi. You know, we're going to move forward with this other operator, this other owner. But this property means a lot to our family and we want to keep the family name attached to the property in perpetuity or however long whatever negotiate might have been like 100 year contract. They said if you keep the name, our family name, which is Lanier's in the name, we'll, we'll entertain selling to you. Or like.
[00:03:25] Speaker A: Yeah, they already have a. Google have a presence. They've been doing it for 30 years. Hell yeah.
[00:03:30] Speaker B: You know, it's like, it's like, it's like a. Yeah, it's exactly, it's a win win. You get what you want. People know the name and kind of the operating brand keeping lanyards in there. So we changed the name but we kept layers in there and that allow us to get us this, this deal. You know, 400 pads, mom and pop, you can't, you can't get that in apartments. You might get that 20, 30, 40 units.
[00:03:51] Speaker A: Right.
[00:03:52] Speaker B: Once you, especially in DFW, we're here in DFW. Once you get to 100 units, that thing has been bought and sold three or four different times in five years. Right. So the, the fact that I, I heard some stat like 70, 80% of RV parks are mom and pop compared to, to mobile home parks which is a little, a lot of multifamily operators are kind of shifted in the mobile home parks because you can have Freddy and Fanny debt on those. You can't get that on RVs. They need a little bit more creative with the debt. That's really where the opportunity is. So that's why we love that asset class. And for us, you know, I participate in asset management calls kind of lightly as an advisor, but basically kind of a capital raiser. We wanted to give our investor base an opportunity to get into this great asset class that really is if you pick the right park, really conservative, good cash flow, if you have good operations. We wanted to give that opportunity to Our investor base.
[00:04:53] Speaker A: Yeah, for sure. And I think that's a great point you brought up at first, is a lot of park owners, you know, their mom and pops, unless they have a secession plan for their next generation to pass it down to, like they're going to have to sell. You got to retire sometime. I was talking to this old man in Beaumont, 93 years old, and he just like, if, if I don't get my number, I don't care. I'll just keep working till I die. I'm like, what? Take the five and a half million dollars and freaking retire, old man. You know, you don't, I know you don't have any debt on this property. Like, take the money, come on.
[00:05:23] Speaker B: But, but, but what else is he going to do, right? It's probably his identity, right?
[00:05:27] Speaker A: Yeah, yeah, his wife's retired. But either way, what I'm just seeing a trend of like, there's people know they're going to have to sell and they want to sell. There's a lot of, not a lot of inventory out there, but you know that I just hear a lot that they don't want to sell to big corporations, you know, because this is like their one big project of their life. Oftentimes sometimes it's multiple parks, but often this is their one big thing. And so like, it feels good to pass it on to, to people more like me, you versus, you know, the big corporations.
They're just trying to buy everything up.
[00:05:55] Speaker B: I guess a lot of times the big corporations are gonna do things that they wouldn't do. Right. So like, that was the other thing we did at that, that park. We knew that there were people there that have been 10, 15, 20 years. They had brand recognition, they know like and trusted the owner.
We didn't push up the rents a ton. Like probably the big park operators would have pushed the ton, forced people out. We, we made a lot of improvements before we push the rents.
That's the driveways kind of through throughout the park, kind of dilapidated, not fixed up. We repaved everything. We got a lot of people and a lot of momentum saying, oh, wow, this new owner is coming in. They're investing in the park.
We feel more comfortable now. If you're going to push your rents up a little bit, we feel more comfortable because you're investing in us, you actually care.
And a big owner might not necessarily do that and really care. They just, if they're publicly traded, they just care about their shareholders, right?
[00:06:52] Speaker A: Yeah, right. There's no, there's less personal touch to It. And then that's also another smart one too, is that, you know, naturally prices cost increase, so rents got to go up. But you know, doing, doing the roads, especially in the improvements first is pretty, pretty good because people feel like you care. And then, you know, rent's got to go up. If you're doing asphalt, it's seven, eight dollars a square foot.
It's pricey. So, so, so that's good. That's good.
And then, so that's in Carolinas. And you see you have four parks. Are they all in the Carolinas?
[00:07:23] Speaker B: So we have one in Carolinas. That's the big one. We have one in Indiana, that's near Indiana University, near Lake Monroe.
And then we have, we have three in Tennessee. One is kind of a mix of mobile home and rv. It's in Georgia and Tennessee. And then two that are in Tennessee proper.
And the interesting thing about what we target, we target that really high cash on cash. And this is why we haven't done a deal in about two years. And we're targeting bigger parks in order to get that. It's, you know, it's challenging.
The pricing really hasn't come down a ton for sellers.
This one park in Pigeon Forge and I have a lot of friends that have bought short term rentals there being.
[00:08:10] Speaker A: Yep.
[00:08:11] Speaker B: Those things have struggled. Right. Because Airbnb has struggled. RV park industry has changed since COVID What we really focused on is longer term leases. Right. Or contracts, you can't call them leases.
Our thought was that would kind of withstand this whole kind of COVID pullback that we thought would happen where everyone was kind of traveling and doing the COVID thing. There's kind of a draw to come back to office.
[00:08:36] Speaker A: Yeah.
[00:08:37] Speaker B: So that's like a, a trend. That particular park in Pigeon Forge compared to the rest of our parks has struggled. We had pause distributions to our investors because it's about 50% long term, 50% short term. We started the distributions up again and my, my operating partner is very, very conservative. I knew when he was pausing he probably could have continued to send out distributions, but he wanted to be consistent, conservative, hold back cash just in case. So we started them up again. But that's one of the strategies that we implement. We look at longer term leases that really, I mean, you look at some of these RVs like the tires are not inflated like that. That RV is not going anywhere. They've been there for 10 or 15 years. They're pretty much living there, or they're using it as kind of a vacation spot like Especially the one in. In the Carolinas is like right on the water.
[00:09:30] Speaker A: Yeah. I love that when people, when you have a park where they. They're just there for the summers, but they're paying for the year, or they're just there for. For key, you know, seasons or whatever. That's wonderful.
[00:09:40] Speaker B: Exactly. So we talk, we target that. And overall, out of those five parks, that one park that had the more kind of transient nature struggle through this kind of downturn.
So that's why we focus on the longer term. The other ones are still paying distributions, doing well, and kind of that's what we focus on.
[00:09:57] Speaker A: Nice. I want to touch base on the Indiana one because I have a few people that reached out to me that were interested in developing a park outside College Station, you know, college town. So.
So you're Indiana 1. You mentioned next to university. How far is it from University? And do you get like a lot of traffic from the university?
[00:10:15] Speaker B: Yeah, so it's about an hour from the university.
That one is. Is unique and interesting because the median household income in that area is very high because it's on the lake.
So there's a lot of people that come from Indianapolis.
[00:10:30] Speaker A: Okay.
[00:10:30] Speaker B: And they have their, like, pimped out RV or big, like, you know, truck or like a bus.
[00:10:38] Speaker A: Yeah.
[00:10:38] Speaker B: Big motorhome in there. So some of these RVs are really, really, really nice. It's kind of unusual outside of kind of our portfolio.
And they used it as their kind of vacation spot, or parents are coming to visit their, their kids. They'll come to the spot and they'll camp, you know, with their kids.
[00:10:58] Speaker A: So it's more of like a destination type.
[00:11:00] Speaker B: Exactly. So it's not. It's not so much connected to the school, but because it's. It's near the lake and we still have some land that we could build more. More pads, potentially on the lake.
Yeah, it's. It's more destination spot. And that's another kind of thing that we focus on. We try to tie it to like Pigeon Forge. Even though it's 50. 50 long term, short term, it's a destination. The one on the coast, it's a destination. It insulates you from kind of a downturn and kind of. You have constant people kind of coming in.
[00:11:33] Speaker A: Yeah, yeah. And you're kind of riding the flow, too.
I've sat down with a guy with a park in Oregon and, you know, he's having a battle that. On like optimizing your monthly because. And over there in the summertimes, I mean, he's sold out. So like, so it's a constant battle. It's like, hey, if I rent out these spots monthly but you know, all the short term stuff is coming in. So it's, it's, it's definitely a way to optimize your operation, I guess you should say, and kind of ride the waves, identify the, the shifts and everything.
[00:12:04] Speaker B: And there was a time maybe three years ago, there's always these cycles, like they're multifamily. One of the reasons why I got into RV parks because multifamily kind of, I thought it was getting too pricey. So it's like, okay, let's look at another asset class.
So we shifted and one of the things we saw was when we kind of went, we, we thought we were going to do it my, ourselves, me and my partner, we're doing multi family. Let's pivot. We're going to self manage, right? We're going to, we're going to do this management.
There's not a lot of third party management. I love that advertisement that you talked about. Third party. There aren't a lot of third party managers out there. We spoke to the top two or three in the country at the time. One of them was being acquired by a big operator. So it was only two. It's like, okay, well maybe we'll do this ourselves. So we drove down, I drove down to Houston and looked at US park that maybe I found on LoopNet or something and it looked like a pretty decent park. And I called one of the competing parks and I spoke with the manager, this woman, she could tell she was a tough lady.
And I was like, you know, how do you manage when people don't pay rent? She's like, you know what? I used to be a truck driver and people don't mess with me. If these people don't pay their rent, I'm basically going to kick the crap out of them.
[00:13:22] Speaker A: And that's got to be tough, man. People will take advantage of you.
[00:13:25] Speaker B: Yeah, but like that's when I realized like me and my partner, that's not who I am. Me and my partner cannot self manage.
We need to either find a third party that's going to do it which was challenging or partner with someone that had third in house management.
That's when we found our partner Dylan and those. That's the blessing that we found him because he's such a good operator. He's super smart, super honest, super hard working and he's the guy cold calling. Say again.
[00:13:54] Speaker A: He was the guy that was Having his dad do the cold calling. Yeah, yeah, yeah, that's your guy.
[00:13:59] Speaker B: Exactly.
Exactly. And he's so he's, you know, his niche is he has, he, he has an institutional mindset. Right. Because he's kind of came from that space, but he's, he's small. Mom and pop operator. Right. They have in house management, but outside that management they maybe have like three or four employees.
And he's constantly rolling his sleeve up, doing his stuff himself.
[00:14:24] Speaker A: Yeah, you got, you got to, you gotta make these pivots and like you're talking about with, with some of your parks, if there's, the short term's not taking off, sometimes you gotta put some cabins in there, sometimes you gotta put some yurts in there or some, some affordable housing, kind of tiny homes, if you will.
[00:14:39] Speaker B: Yep.
[00:14:40] Speaker A: So you got to make these adjustments.
Like I've seen, I've seen some parks that, you know, they didn't really plan the design very well and there just wasn't enough showers and clubhouse, you know, services. So there's places like Onotega, I think, name of them. They, they focus on building wagons, but they also build in like just kind of plug and play showers and laundry facilities that you could just tie into an RV site. So if you're.
[00:15:05] Speaker B: Wow.
[00:15:06] Speaker A: So if you just need to make a quick little shift because you're a short term park and you realize you keep getting complaints about not enough washer and dryers and showers, then you know, you could just bam, 30 grand, put that over here and you just add a nice amenity for.
So I don't know, parks always need something, you know, you got to add some covers, you need to upgrade the WI fi or, or you know, make some adjustments, remodel those showers because somebody tried to flood it out or something.
There's always something, but it's key to have those people and processes in place for when those things do happen to keep up with it.
There's always broken water spigots or just, you know, just little things.
So I, I think it's good you found, you found your partner. That's a really good, a good point and lesson there in business and in parks, you know, because all parks you, you know, to run it, you need somebody that's got the owner mindset, the, the operator as well, that can find a good local person for your on site team too, because they're really important, you know, whether you're giving them free site in exchange for a few hours a week worth of work or you know, pay them 50 grand a year as a couple to, to, to really run the place. So.
[00:16:11] Speaker B: Yeah, my, my partner, a lot of this stuff that we own is in near the Carolinas, so he's trying to build mass there. He has some economies of scale with vendors region. You know, he has a regional manager that can kind of spread the resources around those properties. So you, you know, you kind of get some scale. We've looked some, we've looked at some deals in Texas and he kind of keeps raising. The pad count initially was 100.
You know, it needs to, it needs to kind of be strong enough to take on the load of the, of the payroll and the, in the property management team and the maintenance team.
Now it's, it was like 150. Now he's like, okay, 200, you know, because it's just, it's going to be more efficient with like more pads and you know, same amount of people potentially.
We looked at some stuff in Lake Lavon, right. There's a guy that I might have connected with that guy. He's, he's, he's a, he's an interesting cat. That guy that develops some stuff in Leak. Lavon. I forget his name.
But we looked at some parks together and it's always been. Most of our stuff is on the east coast. Very infill.
[00:17:20] Speaker A: Right.
[00:17:21] Speaker B: A lot of people just like mobile home parks, like cities don't like you building our RV parks. They're like very anti, like, you know, whatever.
[00:17:30] Speaker A: You guys do any developments?
[00:17:31] Speaker B: Say again?
[00:17:32] Speaker A: I was, that's what I was going to ask you. I didn't mean to cut you off, but if you guys do any developments or is it mostly focused on acquisition side.
[00:17:39] Speaker B: Yeah, it's mostly on acquisitions and we, and we try to focus on more infill where it's already been grandfathered. Like if the city is like, oh, we don't want any more of this, we, we have it. So it meets the need because potentially it is, you know, lower income housing. Right. It meets that need.
And the stuff in Texas, it's really easy, it's really easy to build these things potentially depending on your, your finish levels. So it's like, okay, if you have a lot of land in Texas, like you build one, someone could build one right next to you because there's land there.
[00:18:08] Speaker A: Right.
[00:18:09] Speaker B: So that was kind of one of the challenges we kind of ran up against.
[00:18:13] Speaker A: But we got to see some saturation.
[00:18:15] Speaker B: Say again?
[00:18:15] Speaker A: You're starting to see some saturation a lot of places.
[00:18:18] Speaker B: Yeah, yeah. So we, you know, I, I've stopped Kind of showing deals to him because his bar is so high. And it's like he will look on a map and we'll just kind of see like, okay, how easy would it be to someone else buy the land next to you and build another one?
You know that, that models work for us.
But like, yeah, more infill areas. Like I drive around DFW and I see an RV park like in Richardson. I drive on rights. You've probably seen it around i75. I'm like, we need to buy the RV park because it's so infill.
[00:18:49] Speaker A: Right.
[00:18:50] Speaker B: And it's like almost like a cover, covered land play. If there's some sort of issue where the city says we need to get rid of it, you have that land that's going to be so valuable. Right. It's well located. The people that live there can kind of commute to jobs and things like that.
So that's kind of how we look at it.
[00:19:06] Speaker A: Yeah, yeah, for sure. Because, because a city, you know, they might not like that you're expanding, but they're definitely going to be a lot easier to work with on an expansion versus just straight up new development.
[00:19:16] Speaker B: Right.
[00:19:17] Speaker A: You know, because, because I've seen you're seeing counties even in Texas starting to tidy up. But like, you know, some states like in the Pacific Northwest, I talked to one guy, he had to get 45 permits to build a park and it took like several years of entitlements. I'm like, what?
I mean, I'm grateful I'm in Texas as a developer, but holy cow, 45 permits. I mean, I can't even think how many. I just, I couldn't wrap my head around.
[00:19:39] Speaker B: That's just like telling you we don't want you to do this. Yeah.
Don't want you to do this.
[00:19:44] Speaker A: Yep. Yeah. Yeah. And you also hear different horror stories or you know, Florida is another hot one too. But they, they have interesting things like from the contractor side, I heard last week that if you do a job down there, they have a 10 year look back for your work. So there's a lot of like hunters, you know, attorneys that, that will try to sue you. Nine years and six months. And after you developed a park, I'm like, I'm not getting my life GC license in that state.
Life is just too short.
[00:20:12] Speaker B: Florida does that.
[00:20:13] Speaker A: Yeah, Florida does that. Because I wasn't getting my GC license down there.
Let's see. Because I had multiple people reach out, wanted to build a park and I was like, I'll Go down to Florida by the beach, build a park. Let's. And I was just looking into it, but. But yeah, I was like 10 years. Like what didn't make any sense.
[00:20:30] Speaker B: That. Yeah, that sounds like a very non Florida thing. That must be before they were super pro business, right?
[00:20:36] Speaker A: Yeah, yeah, yeah. Some old lingering law or something. Who knows. But well, awesome, man. Well, I think it's a good stopping point. Again, I appreciate your time and sharing a little bit, a little bit of nuggets there about your operation and your partnerships and, and your journey and everything. So if there's somebody that want to reach out to you, what would be a good way they could do that? Social media? Email.
[00:20:58] Speaker B: Yeah, yeah, you guys can email me directly, Nick, at leon re partners.com or go to our website, www.leon re partners.com or you can check out my Instagram.
It's Nick Leone Partners.
Yeah. But feel free to reach out if you have questions. Love to connect with you, talk about RV parks. Also do multi family warehouse. Love to talk about that as well. If I can help anyway, let me know.
[00:21:30] Speaker A: Awesome. Awesome. Well, there you have it, folks. And if anybody out there wants to be a guest on the episode, you can reach out to us
[email protected] and Nicholas, I appreciate your time again.
[00:21:41] Speaker B: Thank you, sir.
