How to Make Money Acquiring and Owning Campgrounds

Welcome to the Raise Capital Legally podcast and YouTube channel, where we talk about topics of interest to real estate syndicators and fund managers with an opportunity for live questions and answers before we sign off. I'm Krisha Young, the co-host and business development director for the firm, and this is attorney Mola Bosland. Sorry, I just lost my screen for a sec. Operations director and an amazing corporate securities attorney. here at syndicationattorneys.com. Before we get started, please note that audio and video from this event will be posted on our podcast platform, YouTube channel, website, and social media, and will be made available to the public. You can ask questions at the end of this broadcast by raising your hand or typing it in the Q&A. Information discussed during this event is of a general educational nature and should not be construed as legal advice. All right, so today's topic is how to make money acquiring and owning campgrounds. So please join, join our host, Attorney Mola Bosland, as she interviews syndication attorney client Kevin Thurston. This is part of our Beyond Multifamily ebook series teaching our audience about other asset classes they can invest in. All right, so Kevin, Mola, take it away. Welcome.

Well, thank you, Krisha. Hi, Kevin. How are you doing today?

I'm good. I'm good. Thanks for having me on, Willa.

It's a pleasure. I love working with you. We've done a few deals now, and it's good to finally put a face to a name since— so everybody knows, this is the first time I'm actually seeing Kevin in person. We did a lot of our communication via phone, so I'm finally getting to meet Kevin in person. So, Kevin, why don't you tell everybody a little bit about yourself and how you got started investing in campgrounds?

All right. Well, I started my career in public accounting. I was a CPA working in financial audit for PricewaterhouseCoopers, and I did that for about 10 years in D.C. and Seattle, mostly focused on private companies and kind of understanding financial statements and business processes and how they, how they operate, looking at internal controls and Learned a lot about how to run a business and how the financial aspects of businesses work, and also learned that it was not a career that I super enjoyed. And it took me a long time to figure out what, what I actually wanted to do when I pretended to grow up. And that's kind of what led me down the path of getting into real estate. And when I made that decision, I wanted to do it in a way that was something different, something that I enjoyed, that I was passionate about. And being someone who grew up outside camping, always doing adventuring and those types of things, that led me into the campground business. And it was really the opportunity to merge the two where I found an asset class that I thought had a lot of upside potential, could be a great financial investment, but is also something that allowed me to basically camp for a living. And get to be outside and do the things that I really enjoy doing.

Well, that's really cool. You know, when people get to mix their passions, you know, with their career and, you know, it makes it a more fulfilling venture, right? So how about you tell us about some of the properties you currently own?

So as of today, we own 7 different campgrounds and RV parks. They currently all are KOA franchises. We started in Utah. We have 2 properties in Utah, one in Wyoming, one in Kansas, one in Wisconsin, one in Tennessee, and one in Pennsylvania. And we're in the process of purchasing one in Arkansas. And so all of our properties really are kind of a mix of RV parks for camping. We've got tent sites, we have cabins, we have glamping tents, anything from a teepee to a canvas wall tent to A safari-style tent. And, you know, some, some of our properties are, our parks are, are set up for short-term kind of just stop for the night on your way to somewhere else. And we have other campgrounds that are in destination areas where you're gonna go and you're gonna stay 2, 3, 4 days, enjoy the amenities we have on sites, pools, splash pads, daily activities, those types of things, bike rentals. for kids, and we'll have live music at some depending on the time of year, and ice cream, you know, you name it. We try, we try and make it fun.

Make it a whole family experience for your, for your tenants, right? So I think that's also an amazing opportunity for people to try something new, like me, because we were talking about this previously. I am not an outdoors person. However, That sounds like it could actually be fun, right? So I think it'd be something I would try with my family if the destination had those type of things, you know, offered to me instead of just feeling like, okay, I'm out in the middle of the woods somewhere and I don't know what I'm doing. So I think that it kind of seems more of a community atmosphere in, you know, your campgrounds versus just, oh, this is a place to stay. Absolutely. Absolutely.

Yeah. And we, you know, we look for properties and campgrounds that are going to be in areas that we would want to be in, right? If I'm going to go out and I'm going to buy an investment, I want it to be something that I would want to visit because if I don't want to be there, why would anybody else want to be there?

Right.

And so we look for places that are going to be near a big tourism draw. Is it a national park? Is it a big metro? Is it the water park capital of the world? You know, whatever it is. There's got to be a reason for you to want to be there. And so our, you know, our campgrounds are a way for you to travel in a way that you enjoy doing. Bring your pets by all means, you know, and have your own bed, your own stuff in your RV. Or maybe you just like to spend time outside and not sit in the hotel room at night and have a campfire. So you can do all that. But also there's a lot of great— Nearby local attractions and things that you can enjoy while, while you're there too.

I like that. That's really cool. So how do you find your parks besides, you know, I mean, you kind of touched on them a little bit, so if you could elaborate just a little bit more.

Yeah, it's a combination. So we've been doing this for about 6 years and we, we've built up a pretty big network, certainly within the KOA franchise world. And so our opportunities are coming to us from a combination of Other owners that are looking to sell, they know that we are active buyers. They know who we are. They know how we operate, the reputation that we've built within our franchise brand. So we get a lot of inbound deal flow that way. We work with some really great brokers that know what it is that we're looking for and the criteria that we expect, and they bring us some deals that way. We found opportunities just by stopping in. And saying hi to the owners. The second park that we bought back in 2020 was one that I was driving down the road, saw the sign, pulled in to take a look at it and see if there's anything I could learn from how they were operating their campground. Met the owners. We talked for about an hour and a half, and I told them, you know, whenever you guys are ready to sell and move on to the next phase, I'd love to have a chance to talk with you. And they called me 2 days later and said, we're ready. And so There's a lot of different ways that we do it, but the majority of our pipeline is coming from people bringing opportunities to us because they know what we're looking for and they know that when they sell to us, we'll be able to take their legacy property because a lot of these are family-owned mom-and-pop operators. They, you know, with the most recent purchase that we did in Gettysburg, Pennsylvania, The couple that we purchased from, they were second generation owning this park. Their daughter was born there, she was raised there, she moved, you know, she lived her whole life there until she went off to college. And so there's a real emotional aspect to these. And it's not just, you know, let's just sell it and we'll move on. They want to know that what they've built is going to be run in a way that they'd be happy about and, you know, they feel comfortable. So we try really hard to build those relationships with those I love that.

I love that.

Yeah, I love the opportunity too. Like, you, you're this very entrepreneurial spirit. We talk a lot about that on this podcast, like that entrepreneurial spirit. And the fact that you saw an opportunity, you saw this like, place on the side of the road, and you went in there and you kind of like made it happen, but without the expectation that it would happen. It was just like, this is really beautiful.

Like, I like it.

Here's what I could do with this. You know, if you're interested, let me know. I think that's a fantastic way of doing business, to be honest.

It is because it's very face-to-face, especially in this niche, you know, especially, you know, with Kevin talking about how a lot of these are mom-and-pop, you know, businesses, and they have a pride in what they've done over the years, and they want to ensure that that legacy continues and it grows, right? And so I think with that face-to-face interaction that you were just talking about, it gives them the confidence that their business is going to be left into great hands and that someone as capable as yourself will help grow their legacy. Because even though they're no longer the owners, their name is attached to the fact that, you know, we— they created this and it's gonna grow.

Yeah, absolutely. It's a relationship-based business. And, you know, that's one of the things that drew me to this originally when I was looking at different asset classes. Was, you know, campgrounds and RV parks is very fragmented. There's not a whole lot of institutional investing. It's, you know, it's individual owners. And so it is more based off of those relationships. And that's where we saw the opportunity of we could come in and we could build something. We could build a company and a management function to scale this type of investment while there is still that opportunity before the big institutional buyers get wind of this and figure out how to actually manage these properties once they take them over and everything gets consolidated like we've seen in other asset classes.

Yeah, understandable. But like, so how do you guys go about doing your due diligence? Because, you know, in multifamily or self-storage, it's a little bit different, you know, Besides, you know, just looking at, you know, the financials, or, you know, depending on where the property is located, they may have to do like, you know, environmental studies, things of that nature. What do you guys do for your due diligence for these type of, you know, assets?

A lot of it is the same. We do environmental studies on all of our properties. Um, you know, we, we do a very thorough financial audit, which, you know, is helpful with my background as a former auditor. So we do, we do all the standard things that you would think in real estate. You know, we, we look at what is the percentage of repeat guests and we look at what are the occupancies by site type. You know, how are, how are RV sites doing versus cabins and the different types of RV sites? You've got ones with nice patios and outdoor furniture that are more premium, and then you've got some that are back in more standard. And as we go through all of that, we identify where the opportunity is for improvement and growth, because you could have some of those campsites that are performing really, really well. Occupancy is really high, and you can do more of those sites, or you can do an expansion, or you can upgrade. So we dig into all of that. We focus a lot on the market, not just in a sense of, you know, how many people and what's the median income, what's the crime rate. We look at all of that, but As I was mentioning before, it's why are people going to be here? You know, why are people coming on vacation? Because our business is outdoor hospitality. The properties that we're looking at and we're buying are not traditional, what a lot of people would think of as long-term RV parks where it's more of affordable housing and people are living, living there, you know, for an extended period of time. We do have a small component of that within our business, which we really like. But the bulk of our revenue and what we're targeting is people on vacation, and they're going to these areas specifically to spend a few days. And so, you know, we, we do a lot of that, which is the fun part of the job, right?

The—

you could call it business development, market research. If that involves me going out to, to visit a property and checking out all the local hikes or taking my mountain bike and trying the trails and getting pictures and videos of these things, right? That's the fun part of this, right? That's all. That's all work-related, at least is what I tell my wife. So we do a lot of that. And then, you know, the big things where we identify where's the biggest risk, what's going to— what could kill the deal. And for campgrounds, the majority of which, especially the type that we're targeting in the price ranges, these are properties that were built in the '60s or '70s. You've got really aging infrastructure. So we do We do a lot of inspections around sewer lines, and if it has its own sewer treatment plant and the plumbing and the wells and the electrical— we're looking at a property right now that has some really old electrical that's going to need to be upgraded. So we're getting 2, 3 different bids from contractors to make sure we understand, you know, is this up to code? What needs to be replaced so that we can budget all of that into the purchase and negotiate it back with the sellers when we find things. So we, we don't rush our deals. We try and do at least 60 days of diligence to give us enough time to thoroughly vet all of these things. And you can never find everything. But, you know, we, we, we've identified over the years where the areas where we know we're going to have headache and, and focus a lot of our efforts on those, those items.

Okay, well, that makes a lot of sense, you know, due to the fact that this is a different type of asset class, you know, especially because it's more— you have a transient type of tenant, right? And everybody's there for a different purpose. Um, you know, I think I like how, you know, you said you do the different activities in the area, right, to see if it's something that you would actually like to do. Um, and that goes towards a lot of your due diligence. So, and you know, you talked about some of the parts of the due diligence that you look at. So when you're buying these properties, what are some of the things that you do with the parks after you buy them?

So we, we always have to have a plan for it, uh, before we're going to move forward with the deal. What's the strategy? Uh, and like you were saying before, you know, you could have these, um, longtime owners that have done a lot. They've taken this, this campground that used to be just dirt and picnic tables, and they've turned it into a nice kind of premium location. But that takes a lot of capital. It takes a lot of effort. It's a really emotional process because a lot of the owners of these are living on site. It's not just their investment property, but it's their home. And so there's only so much you can do in a given year or 5 years or 10 years with capital constraints. And You know, we've seen a lot of owners get to a point where they've done as much as they're willing to do, and they're okay with the types of returns and where the park is, and they don't want to take it to that next level because that's going to require a whole other amount of effort to operate it. You're gonna have to bring in more employees. You're gonna have to do all these extra things. And so we look for those opportunities of where is there still meat on the bone? Is there land that we can expand and we can add more sites? Are there sites that we can improve? Are there campsites that are performing really poorly compared to the others, and can we invest in those to take the worst site from the best to the best site? You know, is there land adjacent that we could buy for future expansion? And some of this is, you know, it's, it's almost kind of a cookie-cutter approach. It's, it's a little bit different for each property, but you're going to have campsites that don't have sewer hookups. And campers today in their RVs, they want to be able to, to handle their, their black tanks at their site and their sewage. So we add full hookup sites. RVs today are a lot different than they were back in the '70s. And so people now need 50-amp electrical service. And a lot of these campgrounds only have 30 amps available in a lot of their sites. So we do electrical upgrades, we add premium patios, we add amenities. And we'll typically do it in a multi-phased approach. What can we do in the first year or 2 to drive new camper night growth and drive incremental revenue using the existing footprint and what we have to work with? And then phase 2 is once we've proven out the demand and gotten comfortable with the operations and the people and had all of our onboarding processes in place, what can we do to take it to that next level if it's a larger expansion?

Okay.

I can see why this is an attractive syndicate to invest in.

We think so.

Yeah. I mean, it's well thought out. It's well planned. Lots of growth potential.

A lot. So speaking of growth potential, so what's your growth plan for your business? We—

so we have a target right now of doing between $20 to $30 million of acquisitions a year. So our portfolio today is probably around $30 to $35 million in value across the 7 parks that we have, and we would like to get that up to $200 million in the next 5 years through a combination of acquisitions and through forced appreciation on the assets that we have, right? As we can drive that additional revenue through the value-add we just talked about, we can streamline the operations and manage expenses and bring up the bottom line. And our thesis is over a period of time that this asset class will follow what's happened in others in the past. If you think about mobile home parks, self-storage, where these were fragmented industries, not any institutional investing, it became a popular investment. People identified it as a huge opportunity. And then as those industries consolidated, cap rates compressed and values went up. And, you know, our, our goal is to build this institutional-scale portfolio now by buying good assets, making them better, operating them well, cash flowing those for our investors, and then driving up that value over a period of time through the things that we talked about so that if we see that cap rate compression and institutional attention come into the RV park and campground space. That's just a further benefit in driving value of our portfolio over time.

Wow.

Understandable, because I remember the boom into self-storage and those other assets when you only had people investing in them here and there, and then all of a sudden the popularity became huge and people started to move more away from multifamily. I know a lot of places and a lot of programs coach on just multifamily and they don't spend time focusing on any of these other asset classes. So it is really important that you are here today talking about campgrounds because not a lot of people realize that you can do syndications and you can make these different investment opportunities out of campgrounds. So what do you feel differentiates campgrounds from the other asset classes?

Well, I think what, what is a challenge for a lot of people is there's a couple of things. Is one, you do have a seasonality aspect to the business. So depending on where you are in the country, you know, people aren't always going on vacation year-round to that area. So we have one of our campgrounds is only open for 4 and a half months a year. And so we have more off-season than we do busy season. So, you know, that can be a little bit of a turnoff for people. But we look at it and we say, if in that 4.5 months we can generate $1.2, $1.3 million in revenue and we've budgeted our expenses to where we're still able to generate a good cash-on-cash return, the offseason then allows us to then implement further capital improvements and things that we can't do when we're busy. But that seasonality, I think, is a challenge for some people is understanding that. But really, I think the biggest, the biggest differentiator of why this asset class could be a little bit of a hurdle for a lot of people is we're talking hospitality. This is not self-storage where, you know, you can automate things and really don't have to have anybody on site and there's very little interaction. We are all in on delivering a hospitality experience to our guests. So we have anywhere from, you know, 6 to 20 employees on our, on our campgrounds at any given time. And so there's a lot of people aspect to it. And there's a, it's just a lot of work. You know, we're, we've got housekeeping, we've got office and check-in, we've got maintenance, we've got grounds crews. You know, we're restaining cabins, we're fixing broken sewer lines, we're fixing water leaks. There's a really, really heavy management aspect to it that is, I think, the biggest difference between some of these other asset classes. And that's where at KCN we felt like this was an opportunity for us because we can build that vertically integrated management company that we can grow and learn and excel at providing that experience so that it does provide a turnkey passive investment. For our investors, right? It's one thing to go out and buy a campground and have to live there and manage it yourself. Most people aren't going to want to do that. But if we can provide an opportunity to invest in it, and we also provide all of the hospitality and management aspect, then that's not something that's super prevalent right now. And so that I think is something that's that's really key for us. And before we went out and even started accepting investments, this all started with. I bought a campground myself and I moved into one of the cabins and I ran it for a whole season. And I, you know, I was cleaning the toilets and I was mowing the lawns and I was checking people in and I was answering phones. And so we spent 2, 3 years learning the business from the ground up before we went out and said to people that we knew, right? Like a lot of people, we started with friends and family and we wanted to make sure that we really knew what we were doing and felt comfortable that we could provide an actual investment and good return to the people that we care about before we started asking for money.

You know, you hit the nail on the head. I talked to a lot of people that are new in the syndication realm. And, you know, I always tell them, you know, start with your friends and family as You know, they're going to be your biggest supporters because they already know you as a person and they have faith in you. And you just said it, learning this business, hands-on learning, um, to make sure you were able to give your friends and family a good return and to show them that you cared about their investment as if it was even your own. I think that really helps take that step forward, and you still bring that forward with new investors that aren't friends and family as you continue to grow. So I think that's really an important aspect for people to, you know, learn and listen to, because your friends and family will be the first set of people that will always show you the support when you're starting out in this venture. And if you can treat all of your investors the same way you intend to treat your friends and family, people will always have that confidence in you and help you grow in your own business as well.

Yeah, absolutely. I feel the exact same way.

Yeah. So I would like to Kevin, do you have our books? Have you, have you seen our books by chance? We've got 2 of them.

I do.

I've, I've read them both.

Yeah, fantastic. That's great. Um, so in case, for those of you, um, watching or listening, um, if you didn't, if you were not aware, we have 2 best-selling books on how to raise, uh, legally raise private money. Um, if you go to our website or if you, uh, text the word syndicate, S-Y-N-D-I-C-A-T-E, to our phone number, 844-796-3428. Again, that's texting the word syndicate to 844-796-3428. Or if you go to our website and find the link that says free book, you'll get an option that asks you whether you've raised capital before, yes or no. If you've never syndicated before, click no, and you'll get a free copy of our first book here, which is like so awesome at helping you wrap your head around all of the steps that you need to take in order to raise capital legally. And then we have our second book, which is more like an encyclopedia and a desktop guide that I'm always in, trying to understand the nuances of the law around syndicating. So Thank you. Continue.

And well, and just a little side note about what Patricia said about the book, they're also available on Kindle, and I keep the Kindle version. And I know that when with each book that Kim has provided us, I always keep the Kindle version open. And sometimes someone will ask a question that I, I'm like, oh, I don't really know. And I can go into the book and Kindle, and you know, you can Tag for words and, you know, pull up, you know, the different information. So it's always a good reference guide to always have on hand, right? So just a little side note there.

We're using technology.

Yep. As we grow with time. Well, I have both. I have hard copies and I have the Kindle version. But, you know, the Kindle version is a little bit more go-to while you're talking to somebody on the phone. So back to you, Kevin. So we were talking previously a little bit about seasonality, and you talked about how you have the one park that's only open for, you know, 4 months at a time. How do you deal with seasonality across the board in this whole asset class? Because a lot of your parks are probably seasonal, and they may be open for longer than, you know, 4 months at a time, but a lot of them would— I would guess are more seasonal than, you know, any other asset class.

Yeah, it is something that's different. And so there's a couple things that we do is if we're looking at an opportunity where it is truly seasonal, it's only open for, you know, 4 or 6 months a year, we make sure that the operations, the cash flow is still going to hit the targets that we need to provide the returns to investors to make it worthwhile of an investment. So even if it's not open year round, we're only interested in it if it's going to cash flow enough during the period of time that it's open that it makes sense, and then we just budget accordingly. But on top of that, one of the things that we're doing is we look for opportunities, and it's going to be market dependent, but opportunities where we can layer in longer-term extended stay or, you know, your kind of traditional RV park monthly type tenant or guest. And so we've done that successfully at a lot of our parks. We took one where it's a seasonal property and we did some investment into the site so that we could keep some of them open year-round. You know, you got to adjust the water lines and things so you can keep that running. And we took it from about $5,000 a year in monthly RV revenue to we'll have about $130,000 this year in revenue from extended stay guests. And that includes people staying throughout the winter. So we're able to provide that cash flow during the time when the campground itself is not technically open and operating. But we've got managers that live on site. We've got people there. And so if we can adjust our properties to accommodate that, we can put in electric meters. And so we can bill back electricity for those things. And then when we do our expansions, we build those sites in a way that they can be used year-round. So that's not always going to be the case in every market. There might not be a demand for it, but in the majority of the places that we're going, There's going to be people that are looking to buy a house and they're going to live in their RV for a few months while they look to buy a house, or they're construction workers and they're there for a project for 6 to 8 months, and— or traveling nurses. You know, there's, there's a whole bunch of different reasons that people are traveling around in their RVs. And so we build up that monthly or extended stay revenue and we can do that, spread that across the year. Which helps out with the seasonality. The other thing that is kind of a built-in benefit is because when we are open during the main camping season, we're so busy, there's so many people on the property that there's a lot of things we can't do. If there's a big project that requires some electrical upgrades or we have to dig a trench or we need to sand down a cabin and restain it, a lot of that we can't do during the camping season because it just interrupts operations. It gets in people's way. So We use the downtime, the offseason, to work on those capital improvements that require more of a heavy construction aspect. And so if we didn't have some time to be able to do that, then we'd really struggle to find opportunities to get that work in.

Okay.

It would let you close.

Yeah, yeah.

I mean, when you're busy all the time, you can't get to all the little projects. Our to-do lists just get longer every day. The other thing that we do is to try and keep our people engaged. We, this last offseason, you know, our managers, we typically will keep on payroll year round and we keep them occupied doing offseason projects and, you know, repainting things. If there's nothing you can do outside because it's too cold and there's too much snow, what can you do inside? But we did a, we did a company-wide book club. this offseason to train our people. And we read Unreasonable Hospitality, and we, we met every week to plan out like, what are the things that we can do to provide that next level experience for our guests and collaborate across the team. So we stay really busy, really busy, even during the downtimes of the year. There is no real offseason for us. There's just times when we have more campers and times when we don't.

Okay. Well, well, since, you know, because it kind of ties hand in hand, how do you balance out though, like, the long-term tenants versus your transient people, right? Because they each have different needs when it comes to the specific campgrounds, right? So how do you create that balance between those 2 types of needs?

The, the first thing we look at is the economics of it. Um, for the most part And there's always going to be exceptions, but for the most part, we could probably fill up the majority of our parks with long-term RV guests. But financially, that doesn't work as well for us. So we look at what is our demand and our occupancy for our transient or short-term guests, and how much room do we have that we can fill in the slower times or the unused spaces. So that's how we look at the initial allocation, whether it's 80/20, 70/30, 60/40, whatever it is, it's going to be market dependent. So that's, that's one thing that we do. The other thing that we look at is how can we structure it in a way where the experience isn't impacted negatively for either of those groups? And so when we're, when we're building sites or doing an expansion, we will typically do an area that is separated from the main part of the campground for those extended stay or long-term guests so they can have their own space and they're not bothered by, you know, the overnight guests with their kids on their bikes and all of that. So to the extent that we can kind of create 2 separate parks within the same property that accommodate both of those, that's what we, that's what we work for.

I think that's really interesting. Because, you know, they all, you know, they have different needs. And I think that giving them their— the long-term people their own type of space and their own type of environment, so it doesn't feel so— because it's one of those complaints that people have with Airbnb. You know, you go stay, you bought a house, and then the people next door are renting it out as an Airbnb, and every minute there's someone new living next door to you, right? So I, you know, I think that, I think that gives a comforting feeling to some people that, you know, you don't have to be with someone every— someone new next door to you every day, you know, or every other day. So I think that's kind of a cool concept. Um, so yeah, how do you manage your marketing?

That's, that's a great question. Marketing is not my strong suit, and I knew that from day one. So there's a couple of things when I got into this. One of the reasons that I looked at the KOA franchise system was specifically for that level of support. It was a new business. I kind of had an idea of what it might entail, but I knew that by getting in with the franchise model, I'd have support. And that includes a big national marketing group. There's, I mean, millions and millions of dollars that are spent promoting the KOA brand, but that's not enough. And that doesn't help us move the needle on our particular properties. So Just earlier this year, as we've been growing our team and scaling up our operations, we hired a marketing manager who now is dedicated entirely to all the various campaigns and things that we can do. If it's email campaigns, if it's social media, if it's working with local businesses, the Chamber of Commerce, all of these types of things that we can do to get our name out there To get the information about why you would want to stay at our properties and what your experience would be like. We're putting together, you know, example three to five day itineraries. So come stay at one of our campgrounds, and here's something you could do on day one. Here's where you go to eat. Here's the hike you go to do. Here's the local museum. Here's the water park. Day two, you're gonna go do X, Y, and Z. Day three, you're gonna do this. And so. Getting just that awareness of, of all the cool things that you can do out there through the various channels. And marketing is, is something that we're, we're improving on all the time and finding new ways that we can, we can promote the, the campgrounds. Because again, this is, this is part of this industry that I think has been really overlooked for a lot of years. And so as, as we get better at it and learn how to use the tools and bring in the content that people are looking for, we can, we can bring in a lot of people like you, Mola, who doesn't really look for camping experiences. Once you see what it's actually like to come stay at one of our properties, you'll, you'll want to come.

You'll be hooked.

Listen, outdoors is scary. I mean, I am not, um, it's, I, you know, I'm not scared of like bugs and animals. I don't think I'm gonna get like eaten by a bear or anything like that. I just can't see the concept of sleeping outside. So like maybe like a cabin. I think I could be more comfortable with the cabin. I just need a little bit more of like home and like home amenities, like home stuff. I don't know.

For what it's worth, we did have a bear in one of our campgrounds about 2 weeks ago.

Oh, nice.

But everybody was fine. And, uh, everybody went home with a great experience. And, you know, those are, those are the things you're missing out on, Lola.

No, no, no, no, no, no, no, I'm okay. I, I'm, you know, I am a very small human being. I am only like 5'2, right? And this whole, you know, I live in Florida where we've got gators. We do have bears. I live in North Florida, okay? And, you know, when they tell you like you run with your hands up to distract them and all that things, I'm not doing that. I don't have any desire to be outside. Like, I'm good. I know, I don't know what to do if I see a bear, right? When they have one at Disney World, they cut down, they shut down half of the park so they can get rid of the bear. That's all I know about bears. I'm good.

That's, that's, that's what we're here for. We take care of that for you so you can just enjoy your cabin and your nice Keurig coffee machine.

Keurig part works. See, that's cup number 2 for the day. Like, you know, I can do the Keurig.

Leave your food around. That's, that's the most important thing.

Well, I'm used to that. I have kids. I can't leave my food around in my own house. I mean, hey, I'm used to those things in life, so it's okay.

But, uh, you can totally make camping glamping. You can totally make it as fancy and home-like as, as you want, or as you want.

I need a portable TV, some internet so I could like binge watch some TV. I don't, I don't know. I didn't like— I mean, I just know I've never put much thought into what I need to be outside. I just knew that like when you see people in a tent, I was like, that's not me. I can't be in a tent outside sleeping under the stars. It looks romantic. It looks beautiful. It looks so peaceful, but it's not me.

We've got you covered. We've got your internet. We've got, we got everything you need.

Right now in an RV, I could do that. Like, see, my best friend, they have an RV and we hang out in the RV all the time. I could do the RV because it's got like bedrooms, it's got bathrooms, they've got TVs, you know, kitchen. They have all the things inside the RV. So I think I could like go and be in a, you know, in a campground with an RV. Like, I could do that part.

You can be indoors somewhere else.

Yeah.

Yes, yes. Now the hiking, like how Kim is on this John Muir Trail, no, that's too much walking. That's like, you know, be sweating. I, you know, I don't know. I sound so bougie, but no, it's like, I was like, I was just not made for outdoors. I just, I don't know. My parents had me in Brooklyn. I'm, I'm, I'm used to buildings. I could do a lot of walking amongst the buildings. You know, I know how to dodge rain and hold up an umbrella. You know, you know, I wouldn't know if I have to have those things. I have a rain suit. I have a rain suit. I think I can do that when I go camping. I do have a rain suit in my house. My husband is very prepared, outdoor prepared from being in the military. I'm just not.

Well, the good thing for us is there's, there's over 60 million Americans that identify themselves as, as camping families. So, you know, we can't win them all, but there's a, there's, there's a big pool for us to pull from.

I do. I have, I have a lot of friends that do go camping and they really enjoy it, and they're always looking for new places to go. I mean, a lot of them, when they have time to do it, they're not necessarily traveling out of state because we're still here in Florida, but they— a lot of people love that. I know, like, we live in a very Suburb/rural town. So there's a lot of like, you either have like developments or you have acreage, right? And on like the creek, and we're not far from St. Johns River. So there's a lot of outdoor activities here just in my, you know, neighborhood. Like we have hiking trails throughout even the developments, right? So a lot of my friends are very into the camping lifestyle. So I do understand how it works. Right? It's just me personally, I'm like, oh, go have fun, let me know how it is, take some pictures, right? That's why I said take some pictures, I want to see you on the other side, right? But I don't know about me personally doing that. So, um, let's see. So back to this, you know, this wonderful, wonderful asset class, right? What do you find is some of the challenges in it though, beyond seasonality?

I mean, we've, we've touched on some of them. You know, the, the, like every business, the people part of it can be the best part and can be the hardest part. So, you know, the, the challenges that we have really are, you know, how do, how do we make sure that we're meeting our guests' expectations when they come to camp? And, you know, over the last several years, the level of expectation is raised a little bit of what people are expecting. And so we've got to meet that. And whether that's investing heavily in, in better internet, which to me sounds funny, right? You know, you're going to go camping, you're going to go outside and you got to have high-speed internet. But we understand that that's important. We want to offer that. And a lot of people who come and stay with us, they're working while they're traveling. So, you know, it's the people side of it on managing our own teams. and getting the right people in the right seats to run the business and to be the guest-facing aspect of our company. That can be a challenge. Obviously, the seasonality plays into that, right? Where some people are looking for year-round employment, some people just want a job for the summer. So we have to balance around that. You know, the The general economy can play into this. And that's another, I think, difference between our asset class and others where vacations and leisure travel is something that a lot of times can be cut from your budget when things aren't going well. You know, so there's some fluctuations there. But one of the things that, that draws us to this versus other types of hospitality is No matter what happens with gas prices and other just costs of travel in general, camping is always going to be the cheapest option. So even if inflation is, is a challenge and you can't make that trip to Europe or you can't go to New York, you can still, like you were saying, Mola, you can still camp close to home. You could go a couple hours and spend a weekend and get that experience away from home, away from work, away from your day-to-day. and reconnect with the outdoors and still do it in a way that is budget-friendly, right? You can bring your own food. We've got refrigerators, right? If you're in an RV, you can bring all your own stuff so you can control some of those costs. And the, the offer that we provide is, is always going to be one of the cheaper options of how you can travel. So we have that going for us. You know, some of the other challenges that we face You know, just like every other asset class, interest rates have a big impact on the types of returns we can get, the pricing when we're buying a property, valuations, right? If we, if we buy in a period of time where interest rates are low and values are higher and then it flips the other way, which is kind of where we are now. And I know a lot of people are in trouble because of that situation. You know, there's a, there's a chance that the overall value of the properties we bought may have come down. But the flip side of that is we're buying cash-flowing, profitable assets. And so even if we have to ride out a period of higher interest rates and maybe stagnating values, we're still able to provide cash flow and we're still profitable and we're still giving distributions to our investors. So, you know, there's challenges just like anything else. We think over time options for financing and lending will improve. That's something that's a little bit different about this asset class where it's a lot easier to get, you know, lower rate or agency-type debt for a mobile home park. You know, lenders look at those as because they're not transient and there's not the seasonal fluctuation, there's not the volatility, as it's a little bit lower risk. And so there are better financing options. You know, we're— we've been really successful in getting the types of loans that we need. And we think over time, new options will open up to us that will improve that part of the business as well, the same as they have for other asset classes that have gone through the same cycle.

Understandable. One thing that we've always, you know, we talk about with some of our clients is, you know, when they ask about getting financing, which you just touched on, is we always say, you know, it's cheaper to pay the bank than it is to pay your investors, right, based on the interest rates. But the appeal in this is your, you know, is your returns, right? So some— in a lot of these areas, returns are shrinking and people are more comfortable with receiving a lower return. So you're almost at the same value or at the same place where you're paying investors almost what you're paying, you know, the bank, right? So how do your investors feel about— are they more comfortable? like your return feeling like it's a safer return? Or do they, you know, are some of them a little bit more uneasy in the beginning?

You know, it's the one of the things that is maybe a little bit different for us is we are in a, you call it a more volatile asset class, right, which means our cap rates should be higher than in other asset classes. So we should be able to buy things at less of a premium because of that higher risk, because of the management aspect that we talked about, which then provides the opportunity for a bigger return because it is, you know, it's, it's just a higher risk investment. And so, you know, part of, part of what we do is when we underwrite a deal, we take a very conservative approach, we stress test it, and we won't move forward with a deal or even put it out to market with our investors until we're comfortable that we can provide a return that's going to outperform what you could get somewhere else. And maybe that doesn't happen in year 1 or year 2 because we are buying things with a value-add approach and it's going to take time to execute that strategy. But our, our model is to buy existing properties with a history of operations that can prove out this cash flow. So our investors know when we go in and buy it, there's going to be profit to be distributed. And we're, we're now to a point where we're doing our first distributions within the second quarter of taking over ownership. So, you know, it's just one of those things. I think it's, it's a little bit of education for new investors that haven't looked at this before. Most people are familiar with multifamily. You know, more and more people are getting comfortable with investing passively in mobile home park syndications and self-storage. But everybody has to go through that phase of learning the ins and outs of the investment and what those risks are, because there's always something. Doesn't matter whether it's a campground or, or an apartment building. So we, we do our best to understand all the risks, what we can do to mitigate them, and make sure that our investors know what we're facing and, and what our plan is and strategy is to, to address those items.

Well, thank you for, you know, sharing all of that with us. I think we might take some of the questions that are, you know, in our chat. So David asks, what is your plan if the economy changes and you have less travelers?

So we've seen a little bit of that over the last few years when, when COVID shutdowns happened and things started to open back up, the camping industry and RV parks saw a huge surge. And, you know, we, we had some of our properties went, you know, 60% year-over-year growth in 2021. And that's obviously, that's not sustainable. So over the last couple of years, especially, you know, as, as inflation has gone up, gas prices spiked a couple years ago, we saw a little bit of a decrease in that. So what do we do about it? We, we continue to market, we continue to push the benefits of being outdoors, but then we also look to balance our offering with if we're not going to get as many transient vacation type guests, let's go out and we'll get the long-term, long-term campers that need a place to stay. And we get that sticky revenue and we can adjust that allocation of long-term versus short-term campsites to balance that out because there's always going to be someone that needs a place to live. And whether it's temporarily or longer term, And we're set up to where we can do that. And that's a really easy shift.

Okay. Let's see. David also asked, like, are your locations close to a city or towns for more amenities?

We're always located near something. So we have a little bit of a different aspect or character to each one of our properties. And the way that at least within the KOA world, the branding kind of works is you've got journeys, holidays, and resorts. And, you know, your journey is going to be your typical overnight park that maybe there's no reason for you to be there, but you need a place to stay while you're going somewhere else. So one of our better performing properties this year is in a really small town in Kansas, right off of the freeway, about 3 hours outside of Denver. There's not a whole lot of reasons why people would go on vacation there, but there's a lot of traffic that comes in. And so we focus on targeting that. And then we have other properties that are going to be really close to those attractions, to downtown, walkable to restaurants and museums and water parks. And so that all kind of factors into how we're designing our portfolio and what properties we're going after, because we want to have a diversified approach where Some properties are going to be based off of that national park, and that's going to bring people in. And some are going to be based off of being close to a city that's always going to have a demand and it's always going to need, like I said, traveling nurses or there's a university or something like that that's going to bring people in and they're going to stay a longer time. So it's a little bit of a mix and we look for those chances to not focus entirely just on one aspect of that. Because camper behavior and RVers and travel, leisure travel in general will change over time. And so we want to be able to accommodate all of those different aspects to hedge against those fluctuations.

Okay.

Yeah. Yep. Let's see what else. David wanted to know, what's your fee structure for your spots?

So I'm going to guess that that's asking specifically about the campgrounds.

Yeah.

What a camper would pay. And that's going to depend on the market, the type of campsite. And we're rolling out our own kind of internally managed dynamic pricing, which again is something that's newer to this type of asset class where if you were to go back a lot of years, it was people would set their rates and it's $30 a night for a campsite. Doesn't matter if you're in a tent or an RV, and you pay that March 1st or July 4th, right? And so our rates are going to change depending on the time of the year. Is it the shoulder season? Is it the peak season? Is it a premium site versus a standard site? Is it a back-in versus a pull-through? Where's the highest demand? And that's how we, we manage those rates, and we change them as we see changes in what campers are doing. So it could be anywhere from $40 a night for a tent site up to— we have some cabins that are $300 a night. You know, it, it really, it really just depends on where, where the campground is, what time of year it is, and how many people want to stay there. And we've, we've had situations the last year or so where we've brought our rates down to try and manage camper night growth. versus just rate management growth. And we've been successful in that this year where, you know, a couple years ago we, we had really high occupancy, so we pushed rates up, and then we saw a big drop in that coming out of that. So we, we adjusted for it, uh, and modified our fee structure so that we were being attractive and to, to our guests.

All right, well, someone did ask question about seeing your projected returns and info. Um, um, we will put Kevin's contact information in the chat for you. Um, Christian, if you could do that so you can reach out to Kevin at info@kcncampgrounds.com or investors@kcncampgrounds.com. Um, instead of him, you know, specifically discussing different projects and different returns. Um, you know, that's a conversation that you can have with Kevin on your own.

Um, let's see, in the, um, in the Q&A, we've got a couple of—

In the Q&A, we've got a couple of questions. Um, you know, someone asked, isn't, isn't it this type of investment or business very, very only seasonal? But we did talk about the seasonality already with regards to that and how you, you know, handle Um, you know, the property, whether it is seasonal or if you use it to, you know, have long-term tenants during that off time or what you do with the property at that time. Um, then we had Tiana. Um, she said, when you say stress test, do, um, to do a conservative approach, how specifically do you stress test?

So when we're looking at a new property, we model it out and there's a bunch of different factors and assumptions we put into it. There's camper nights, there's rates, there's interest rates. And we play around with that to say, okay, over the last 3 years, historical numbers have shown that camper nights have grown at 5% a year, as an example. Well, what happens if in the first couple of years camper nights don't grow at all? Can we still manage our rates? Can we still get a 2%, 3%, 5% increase on our rate structure? And what does that do if camper nights go down? what happens there. You know, we're very and have been up until this point careful about the type of debt we're taking on where we're not doing variable debt because we don't like the risk of that. And I know that, that some people are in tough situations today because they went in with that approach. And so some of the properties we've locked in 10-year loans. which is the hold period that we put out to our investors when we buy a property, is this is a, this is a long-term investment. This isn't a short-term flip. And so we can budget out what's that debt service going to be for 10 years. And we can also look and say, if we can only get a 5-year term, what happens if interest rates go up at the end of that and play around with that to see, are we still able to provide distributions? Are we still able to grow the overall value of the property over time, right? There's going to be ups and downs. Not every year is going to be 10% growth. We may be down some years and we may be up more other years, but we, we play around with those assumptions to see, can we still increase the value while still providing cash flow on an annual basis?

Okay, let's see. Todd. Hi, Todd. I hope you're doing good. Todd has asked, because Todd is originally from Kansas, right? So he wanted to know, what marketing do you do for that, for the Kansas asset?

So that's kind of our journey-style park. Again, this is an overnight where we could have people pull off the road at 7:30 at night. They check in. They go hook up their RV and then they get up at 6 in the morning and they leave and we have very little interaction with them. So what we do for those is if we're going to buy a park that is made up of that type of guest, it's got to be located in the right spot, has to have visibility and access from those major freeways. We get road signs, freeway signs. We do targeted local, regional, and national marketing for those. We can look at traffic patterns of who's going through, where are they going? You know, if you're going through Kansas, chances are you're going to Denver or, you know, to or from. So how can we make sure that people know that there's a place to stop there? And that's another one where, you know, the branding or the franchise model helps. And I won't say that that's always going to be the case. There's going to be some parks where maybe a franchise or a specific brand isn't going to drive that additional value. But your overnight transient RVer They're going to be familiar with KOA, and when they start to get sleepy or it starts to get windy, they're going to look, where's the next KOA? So we just make sure that our online presence is optimized as best as it can be. We've got road signs, and we make it easy for people to get in and out so that it's a smooth experience.

All right. So, well, we're at time now.

Yeah.

Kevin, thank you so much. Mola. This has been amazing. I think for anybody listening to this podcast, you can really pick out some very savvy business advice in here for sure. You know, beyond just the asset class itself, there's a lot of really awesome marketing and business strategy and number strategy in here that I think anybody could take away and implement that into their own business plan. We didn't get to everybody's questions, but we'll give you the contact details Again, so it's info@kcnccampground— uh, at AC— sorry, let me start that again. info@kcnccampgrounds or investors@kcnccampgrounds. And of course, we are at syndicationattorneys.com. Uh, thank you everybody for being here. Thank you, Kevin. Thank you, Mola.

It's great seeing you, Kevin.

Yeah, you too. I appreciate it. And thanks everybody who joined. Appreciate your questions. Happy to, to talk to anybody who's interested. Our website, caseyandcampgrounds.com, has a lot of information about our portfolio. And obviously there's ways you can get in touch with us to keep that conversation going if you are interested.

Fantastic. Fantastic. Thank you. It was great seeing everybody.

Yeah.

Thank you for joining us today.

Thank you.

Bye.

Thanks everyone.

Bye.