Donna Bordeaux (campgroundaccounting.com) explains that current high interest rates make traditional financing for campground/RV park deals difficult for buyers and sellers. She recommends creative approaches such as seller financing—often involving a large down payment to provide the seller cash at closing and installment payments over several years—and notes the common trade-off where sale price may increase when a lower seller-financed interest rate is used to balance the deal.
Today's economic conditions and interest rates specifically have made it really tough to facilitate deals both as a buyer or seller of a campground. I'm Donna Bordeaux with campgroundaccounting.com and I've got some ideas for you on how to creatively look at making those deals still work even with interest rates as high as they are. Let's get a little creative and dive into how things can happen to facilitate a deal and get smiles on both the buyers and the sellers faces. All right. One of the common things we're seeing right now in the trends is seller financing because traditional financing is so expensive with interest rates. Got a little more creative in some seller financing deals right now with seller financing, that means that you sell the part to someone else. Perhaps they pay you a portion of the cash, like a large down payment to make sure that you get enough cash to exit the deal appropriately. But they'll continue to make payments throughout the next several years. Now, those can take a little challenge here and there. Typically, what we're seeing is that the sale price goes up because the interest rate is lower. That's just a balancing act of the interest rate and the sale price to make that deal work for both parties.
