Short conversational video (Donna Genie with a second speaker) discussing contingencies when purchasing or selling a campground/RV park. Main example: a sewage-system contingency that could change the buyer's decision by about $50,000. The speakers explain that purchase price need not be fully fixed at closing — parties can negotiate contingent pricing adjustments (for example, a seller-finance callback that reduces the sales price or seller-financed portion if the county forces sewer upgrades). They recommend using seller-financed collateral (e.g., a note) rather than unsecured contingent claims, and warn that chasing a long-gone prior owner for remedies is costly and often unsuccessful. Contact: Donna (Donna Bordeaux) at campgroundaccounting.com.
Questions this video answers
$50,000
$500,000
Five years
Chapters
I've talked with many people who are.
In the process of buying a campground.
Recently and I hear concerns near the.
End of the final due diligence process.
About contingent things that are going on. As an example, I had one guy.
Who was trying to buy a campground.
And there were some contingencies based on the sewage system.
He wanted to be able to expand, but the county was pushing for him to expand his sewage system and they.
Weren'T quite sure if this was going.
To come to fruition or not.
So in this case, it was a $50,000 difference in his decision making and that could sway him from buying the campground or not. So one of the things you can.
Look at in buying a campground is.
That you don't always have to land on a fixed price at the end of the deal. There can be contingencies upon closing. Now, obviously risk becomes higher when there.
Are contingent pricing things going on and.
It also makes it more difficult.
From a legal aspect, it's not quite.
As clean, but in this case we suggested looking at negotiating a contingency in the contract. So, for example, if you were going.
To buy a campground for $500,000 and.
You had this contingency on the sewage system, maybe there is a five year.
Callback on a seller finance note that if the county forces you to redo.
The sewer system, that there is some.
Piece of that that reduces the initial sales price or is reduced on that seller financing piece.
Now, I don't recommend contingencies where you.
Have nothing as collateral to back that up.
In this case I always recommend like.
A seller finance note so that there is some way to recapture your funds.
And not just a matter of trying.
To track down an owner who is long gone. That rarely works in your favor and you'll spend a lot of money on attorneys and may still never get anything.
So when buying a campground, if there are some loose ends that you just can't nail down to help you reduce.
Your risk in the purchase, think about.
How a contingency might work and if that might be a solution to push.
Your deal along and have a win win for both the buyer and the seller.
If you have questions about how a purchase can work or some contingencies, we're here to help. I'm Donna Bordeaux@campgroundaccounting.com thank you.
