As a commercial mortgage broker, we specialize in securing RV park financing solutions for businesses investing in commercial real estate. Recently, we worked with an RV park owner seeking to monetize 20% of their RV slips to generate capital for a construction loan to fund infrastructure improvements (lot development, water, sewer) on an unrelated RV park. And we also structured the construction loan on the unrelated property as well, finessing around the downpayment coming from a cash-out refinance.
This case study highlights how our expertise in RV park financing and strong lender relationships helped secure an optimal financing structure, ensuring both cash flow stability and a strong repayment strategy for the lender.
A Unique RV Park Financing Solution
Our client’s RV park lots serve a dual purpose—they are rented nightly, weekly, and monthly, generating steady cash flow, which enhances the borrower’s credit profile. However, the lender’s primary repayment strategy is borne through the sale of portions of the other 80% of the park, which has deeded lots for buyers looking to place their RV or tiny home permanently on the property.
A key financial advantage of this property was that the current rental income exceeded the mortgage payment, ensuring debt coverage even before lot sales. From a lender’s standpoint this offered the best of both worlds. A bridge loan with hefty in-place cashflow.
What Made This RV Park a Standout Investment?
In securing RV park financing for our client, we highlighted the unique bifurcated property structure, showcasing a portion of the park with deeded lots having individual tax IDs. This fee simple ownership model, enabling independent sale or rental of lots, significantly enhanced the investment’s appeal to potential lenders. —each with its own tax ID—allowing owners to sell or rent them independently. This added security to the loan and made the collateral more attractive to lenders.
Additionally, the zoning flexibility was a game-changer. The lots could accommodate RVs (considered mobile homes) or single-family homes, enabling buyers to qualify for FHA 30-year financing instead of the higher-cost loans typically associated with RV properties.
Our Approach to Securing Financing
We crafted a financing package that highlighted the park’s unique features, including:
- Steady rental income from short- and long-term leases from 20% of the RV park
- Deeded lot ownership, which enhances collateral value from the remaining 80% of the RV park
- Flexible zoning, allowing for permanent homes and traditional mortgages
- Strong borrower financials
The Lender’s Key Consideration
The strong likelihood of lot sales of the deeded lots, which are ‘buyer financed’ allowed the lender to extend credit to an otherwise difficult RV park financing in the sense of lender exit strategy. The loan allows for partial releases as construction commences on each deeded lot. While break-even cashflow is great for making commercial mortgage payments, it does not bode well for loan repayment. Layering in the deeded lots enabled our lender to look favorably on this transaction.
This innovative financing approach not only provided our client with immediate access to capital but also laid a robust foundation for future growth. By leveraging a portion of the RV park as collateral while maintaining operational control over the remainder, our strategy minimized risk for both the borrower and the lender. This dual-purpose structure created a win-win scenario.
Our success in structuring these transactions reflects our commitment to blending innovative thinking with deep industry expertise. Ultimately, our creative financing solutions are designed not just to meet short-term funding needs, but to support long-term strategic growth and stability.
Why Work with an Experienced Commercial Mortgage Broker?
Securing specialized creative RV park financing for unique properties requires deep industry knowledge and strong lender relationships. At Financial Compound, we craft creative financing solutions that align with your business goals, ensuring optimal terms and risk mitigation.
Furthermore, our innovative financing models reflect a deep understanding of market trends and regulatory frameworks. By tailoring our approach to each client’s unique asset composition, we unlock hidden value and optimize loan terms.
Our proactive strategies ensure every transaction is structured for maximum flexibility, robust risk mitigation, and attractive returns for all parties involved. This comprehensive method underscores our commitment to excellence and positions our clients for long-term success in the competitive world of commercial real estate financing.
Looking for Commercial Real Estate Financing?
If you need innovative RV park financing, multifamily developments, mixed-use properties, or other commercial investments, we can help.
If you’re looking for expert guidance on creative RV park financing, we’re here to help. Our team has years of experience crafting innovative solutions that match your unique financial needs. Whether you’re considering expanding an existing RV park, refinancing current assets, or launching a new project, we can tailor a financing plan that fits your goals.
Contact us today to discuss how our expertise can turn your vision into reality and secure the best possible terms for your next venture. Let’s work together to unlock new opportunities in the competitive world of commercial real estate financing.