Marine Corps Veteran Robert Preston began wholesaling and flipping while still on active duty in order to make extra money. He then moved on to value-add Class C apartment buildings, but as cash flow and cap rates have compressed, he decided it was time to find a new niche. Robert began investing in mobile home parks next, and his current focus is on RV parks. In this episode, he shares why he is so passionate about this particular asset class:
1. The variety of tenants. In addition to vacationers, RV parks attract tiny home renters, professional workers who frequently travel, and families living in their RVs long-term out of necessity. His ideal mixture is 50%–60% long-term/traveling professionals, 30%–40% short-term vacationers, and 10% tiny home renters.
2. He’s able to deliver better returns than with multifamily. Because the multifamily market has become so competitive, Robert has recently been outbid by buyers who are offering much lower returns than his standard of 8% cash-on-cash and 15% IRR. RV parks allow him to stick to and often exceed his targets.
3. Limited supply and consistent demand. If the economy were to take an impact, Robert says, an RV park can be converted into a mobile home park overnight, allowing RV owners to make their homes there long-term, simply by adjusting his marketing.
4. Fewer expenses compared to multifamily. Robert doesn’t have to worry about toilets, structures, or roofing in his RV parks.
5. Freedom to raise the rent. While raising rent for an apartment complex can often result in pushback from tenants, because RV park tenants typically don’t mind paying a few extra dollars a night, Robert can raise rents as he pleases — sometimes up to 25% overnight — without complaint.
6. He’s seeing a cultural shift in recreation and travel. Since the pandemic, people are beginning to realize that they have more freedom to work remotely and travel — and they’re also realizing flying isn’t the ideal traveling experience. This is causing an increase in professionals hitting the road and working remotely along the way, resulting in an increase in demand for RV parks.
7. He’s an RVer himself. Robert and his family enjoy the RV lifestyle, so he purposely seeks out properties in areas where they would like to vacation.
Robert Preston | Real Estate Background
- Co-founder of Climb Capital, an investment firm with CRE operators that specialize in RV parks.
- GP of 809 units, $45M in AUM
- Based in: Pensacola, FL
- Say hi to him at:
- Best Ever Book: Pitch Anything by Oren Klaff
Greatest lesson: Anyone can buy and raise money; operating is where the rubber meets the road in tough times.
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