Buying a lot in an RV resort

[dons2346]

I am the president of a 316 deeded property HOA. My added comments are in red

1. Is the park a non-profit HOA or a for profit business.
Good question but not really that important
2. Is there a paid management company or does the Board of Directors manage the property.
A good management company is a must. Having the BOD manage leads to playing favorites and budgets that are not realistic as they do not want to be the bad guys
3. Ask to review the HOA financials. What is the history of rate increases, are special assessments allowed, how many properties are in arrears for HOA dues, what is the procedure for delinquent accounts. How much is collected each year in fines.
Most HOAs will not release financials however the tax returns are available for anyone to see on the IRS website. It is a requirement that all financials be made available to the purchaser prior to final closing.
4. Has the HOA been sued in the past 5 years.
Not a standard question but any current court activity must be revealed.
5. Review any contracts the HOA has entered into.
Is anyone interested to see a snow removal contract, or a landscape contract
6. Read the Covenants, Conditions & Restrictions (CC&Rs), front to back.
Read them, read them again and for good measure, read them again
7. Drive the property and see if the CC&Rs are enforced.
Do this but remember there are special circumstances that have to be considered. Have the owners been notified of a violation, are they in a review process with management, etc.
8. If you are cited by the HOA, is there an appeal process.
This will be covered by state law and will be covered in the declaration
9. If you rent your lot and the renter violates the CC&Rs, are you liable for fines?
Probably will as you are the legal owner and there is nothing wrong with this
10. Review crime reports for the area.
A drive around the area will give you pretty good idea here

[Newmar2856]

Originally Posted by brandss

Thanks for all of the responses, great info to consider. For those that have purchased a lot did you find it more like buying a house, the better the location, amenities, etc, less discount off asking price or like buying a coach, start with 25% off. I know this can vary, just wondering what others have found.

For us it was just like any other property purchase. We made an offer, they countered and we agreed on a final price. The sale went through an escrow company and they did all of the lien searches and recorded the sale with the county.

Where we purchased I was able to get an idea of what properties were selling for and we got a good deal. Lots in our park we’re getting snapped up quickly towards the end of summer. I think people were looking for ways to ensure they could camp this year or have a place to land if travel is restricted again.

[bmcgc]

dons:

1. A different set of statutes cover non-profit and for profit businesses.
2. Some parks are to small to afford a management company, some parks should have a management company but do not. Trying to maintain a property with a BOD that may or may not have good business sense or with volunteers is very difficult.
3. Im in Georgia. State law allows any member of an HOA to review any and all financials. I would not buy into a park that refused me access to the financials.
4. Not standard but poorly run HOAs tend to get sued more than well run HOAs. lawsuits have a big impact on the cost of liability insurance.
5. Yes, you should be very interested. Poor contracts bleed money. My HOA had a 5 year copier contract that cost $500 a month. The contract covered the copier and maintenence, it did not cover paper or toner. The office made less than 250 copies a month. That was $2+ a copy, 30k over 5 years. A $200 office Max copier would have done the same job. No one ever admitted how that happened. We had a law firm doing collections. We paid 10k a month and only recovered about 4k a month in collections. The Board President was college buddies with one of the attorneys.
6. You cant know them to well.
7. Correct, but if trash runs Monday and 1/2 the cans are still on the street on Wed, CC&Rs are not being enforced.
8. You need to know this.
9. Touchy topic. Once the renter enters into a contract, it his his property to use. Depending on state law, it may be difficult to evict the renter, meanwhile your fines are piling up.
10. You dont want to be next door to the guy who gets drunk and knocks his wife around or gets cited for noise, or in an area that cars get broken into. Also take a drive around after dark, see what comes out when the sun goes down.

My HOA had a 1.1M budget. My first year as treasurer I got rid of a bunch of really bad contracts, quit paying insurance on vehicles we no longer owned, put liens on properties that owed us money, hired a really good collection company, gave people more payment options, fired the out of state management company and used the money to hire a property manager and an additional maintenance person. Year two I reduced dues 10% and still doubled the cash reserve.

As a property owner, if everything is running smoothly, be happy, if it isnt, get involved and find out why, then do something about it.

[mr.tommy]

Originally Posted by brandss

For those that have purchased a lot did you find it more like buying a house, the better the location, amenities, etc, less discount off asking price or like buying a coach, start with 25% off. I know this can vary, just wondering what others have found.

Yes it's just like buying a house in every way including when you close on the property.

Good RV sites are in big demand especially in states that FTers spend winters at. Negotiating price is nothing like buying an RV. You can probably find a little wiggle room in the asking price but don't expect anything like 25% unless it's real strange set of circumstances, ie...the owner died, left it to his kids and they don't want anything to do with it and just want to dump it. Good luck finding that.

[trx430ex]

Originally Posted by bmcgc

dons:
7. Correct, but if trash runs Monday and 1/2 the cans are still on the street on Wed, CC&Rs are not being enforced.
8. You need to know this.

Getting to be a big fan of a couple dumpsters over a 100 personal cans. Much less noise to notice to look at and enforce. truck is much quieter emptying 5 big cans than 100 small ones. 8 yard plastic lid Dumpsters take big items.

Sorta like liking a entrance fee to get on the island, vs parking meters on every parking spot, lot less to look at,,, and not deal with.
Jekyll Island nailed it with $10 get on island fee, & free parking, [no meters], much nicer consumer experience, thieves don't pay the $10 to go thieving. Rehoboth beach is opposite, free to get on island, but parking meters everywhere, a PITA to manage and less consumer experience.

[Gary RVRoamer]

Lot prices aren't routinely discounted, in part because there is no MSRP except what the seller says it is. However, promotional deals are common, especially when a new park or park section is opening and they want to fill lots quickly. Or get upfront cash. Sometimes prices are negotiable, e.g. if the developer is anxious to get rid of his inventory. And of course resale prices from existing lot owners are always negotiable.

[dons2346]

1. A different set of statutes cover non-profit and for profit businesses.
Agreed however any park should make some kind of profit even after funding a reserve account.

2. Some parks are to small to afford a management company, some parks should have a management company but do not. Trying to maintain a property with a BOD that may or may not have good business sense or with volunteers is very difficult.
Where I own, there was a park manager with one maintenance person. The manager played favorites allowing some owners to skate on monthly dues and only pay half, others implementing the past due schedule at will. A management company along with reducing the BOD to 5 from 7 eliminated the play favorite game.

3. Im in Georgia. State law allows any member of an HOA to review any and all financials. I would not buy into a park that refused me access to the financials.
Same in WA however the financials aren't released to just anyone, you must be an owner at any time. During resale, all finincials are released to the potential buyer.

4. Not standard but poorly run HOAs tend to get sued more than well run HOAs. lawsuits have a big impact on the cost of liability insurance.
A good management company will keep you out of court. Been there done that. The only times I have been in court is for forclosure

5. Yes, you should be very interested. Poor contracts bleed money. My HOA had a 5 year copier contract that cost $500 a month. The contract covered the copier and maintenence, it did not cover paper or toner. The office made less than 250 copies a month. That was $2+ a copy, 30k over 5 years. A $200 office Max copier would have done the same job. No one ever admitted how that happened. We had a law firm doing collections. We paid 10k a month and only recovered about 4k a month in collections. The Board President was college buddies with one of the attorneys.
Once again, a good management company will advise on contracts

6. You cant know them to well.
True

7. Correct, but if trash runs Monday and 1/2 the cans are still on the street on Wed, CC&Rs are not being enforced.
Don't have to worry about that in my HOA, we have a central collection site but having overgrown yards,and messy property do count. There is a minimum amount of time owners get to correct deficiencies all within state law.

8. You need to know this.


9. Touchy topic. Once the renter enters into a contract, it his his property to use. Depending on state law, it may be difficult to evict the renter, meanwhile your fines are piling up.
Covered in the declaration and CC&Rs a to who is responsible. Trying to fine a renter would be like getting blood from a turnip
10. You dont want to be next door to the guy who gets drunk and knocks his wife around or gets cited for noise, or in an area that cars get broken into. Also take a drive around after dark, see what comes out when the sun goes down.
Not the problem of the association, it is time to call 911 and do it repeatability

My HOA had a 1.1M budget. My first year as treasurer I got rid of a bunch of really bad contracts, quit paying insurance on vehicles we no longer owned, put liens on properties that owed us money, hired a really good collection company, gave people more payment options, fired the out of state management company and used the money to hire a property manager and an additional maintenance person. Year two I reduced dues 10% and still doubled the cash reserve.
My budget is a little over $400K. With that we take care of a swimming pool, hot tub, 2 tennis/pickle ball courts, exercise room with commercial equipment, laundry room, pool room, 8 miles of streets, management company,14,000 sgft log clubhouse, mail room,office building, landscape, garbage, 2 on site maintenance persons, common area utilities, fund the reserve account and probably things I forgot. What helps is a good and updated reserve study. All of this is done with a monthly dues of $95 and we haven't raised the dues in 4 years. Before that we didn't raise the dues for 5 years and back then they were only $90.

As a property owner, if everything is running smoothly, be happy, if it isnt, get involved and find out why, then do something about it.

Agreed. That is the reason I have been on the board for over 14 years. Obviously I am doing something right as I haven't been voted off yet.

[awol50]

Buying has several problems.

Costs of ownership only go up and you have little to no control over it.

Have no control over neighbors sloppy yards or junker rvs and are at mercy of park enforcement which can vary and change over time. Neighbors are very close.

Why feel limited to one place? That's why rvs have motors and wheels.

Big upfront cost and often slow and expensive to get rid of your lot especially if the park isn't managed properly.

[dons2346]

"Big upfront cost and often slow and expensive to get rid of your lot especially if the park isn't managed properly."

Bought mine for $19K in '05. Today lots like mine are going for 65-80K
The nice part about having a lot like mine, is that it is in a gated community, I have a concrete pad, full hookups, and a storage shed. Dues are 90/mo that includes garbage.
A spot in a plain Jane storage lot for my coach would be 60+ a month and not much security and no hookups

[bmcgc]

Originally Posted by dons2346

1. A different set of statutes cover non-profit and for profit businesses.
Agreed however any park should make some kind of profit even after funding a reserve account.

2. Some parks are to small to afford a management company, some parks should have a management company but do not. Trying to maintain a property with a BOD that may or may not have good business sense or with volunteers is very difficult.
Where I own, there was a park manager with one maintenance person. The manager played favorites allowing some owners to skate on monthly dues and only pay half, others implementing the past due schedule at will. A management company along with reducing the BOD to 5 from 7 eliminated the play favorite game.

3. Im in Georgia. State law allows any member of an HOA to review any and all financials. I would not buy into a park that refused me access to the financials.
Same in WA however the financials aren't released to just anyone, you must be an owner at any time. During resale, all finincials are released to the potential buyer.

4. Not standard but poorly run HOAs tend to get sued more than well run HOAs. lawsuits have a big impact on the cost of liability insurance.
A good management company will keep you out of court. Been there done that. The only times I have been in court is for forclosure

5. Yes, you should be very interested. Poor contracts bleed money. My HOA had a 5 year copier contract that cost $500 a month. The contract covered the copier and maintenence, it did not cover paper or toner. The office made less than 250 copies a month. That was $2+ a copy, 30k over 5 years. A $200 office Max copier would have done the same job. No one ever admitted how that happened. We had a law firm doing collections. We paid 10k a month and only recovered about 4k a month in collections. The Board President was college buddies with one of the attorneys.
Once again, a good management company will advise on contracts

6. You cant know them to well.
True

7. Correct, but if trash runs Monday and 1/2 the cans are still on the street on Wed, CC&Rs are not being enforced.
Don't have to worry about that in my HOA, we have a central collection site but having overgrown yards,and messy property do count. There is a minimum amount of time owners get to correct deficiencies all within state law.

8. You need to know this.


9. Touchy topic. Once the renter enters into a contract, it his his property to use. Depending on state law, it may be difficult to evict the renter, meanwhile your fines are piling up.
Covered in the declaration and CC&Rs a to who is responsible. Trying to fine a renter would be like getting blood from a turnip
10. You dont want to be next door to the guy who gets drunk and knocks his wife around or gets cited for noise, or in an area that cars get broken into. Also take a drive around after dark, see what comes out when the sun goes down.
Not the problem of the association, it is time to call 911 and do it repeatability

My HOA had a 1.1M budget. My first year as treasurer I got rid of a bunch of really bad contracts, quit paying insurance on vehicles we no longer owned, put liens on properties that owed us money, hired a really good collection company, gave people more payment options, fired the out of state management company and used the money to hire a property manager and an additional maintenance person. Year two I reduced dues 10% and still doubled the cash reserve.
My budget is a little over $400K. With that we take care of a swimming pool, hot tub, 2 tennis/pickle ball courts, exercise room with commercial equipment, laundry room, pool room, 8 miles of streets, management company,14,000 sgft log clubhouse, mail room,office building, landscape, garbage, 2 on site maintenance persons, common area utilities, fund the reserve account and probably things I forgot. What helps is a good and updated reserve study. All of this is done with a monthly dues of $95 and we haven't raised the dues in 4 years. Before that we didn't raise the dues for 5 years and back then they were only $90.

As a property owner, if everything is running smoothly, be happy, if it isnt, get involved and find out why, then do something about it.

Agreed. That is the reason I have been on the board for over 14 years. Obviously I am doing something right as I haven't been voted off yet.

Dons you are in over your head on this topic, you really dont know what you are posting. A non-profit can not make a profit. Thats why they are called non-profits and registered with the Secetary of State as such. My non-profit HOA was debt free, paid the bills, maintained and replaced assets as needed and had both a capitol asset replacement fund as well as a reserve fund. We adjusted the dues as needed to balance the various fund balances to ensure we had enough capital on hand to meet obligations, future expenditures and fund emergencys. We had 7 employees, a 181 acre lake, beach, Class 1 dam, campground, clubhouse, olympic size swimming pool, hiking trails, tennis courts, putt-putt golf course, picnic areas 27 miles of paved roads and numerous vehicles and out buildings to maintain. During the housing crunch out of the 1740 properties in our HOA, over 500 of them were in foreclosure and we were not collecting dues. We still managed to stay solvent.

[dons2346]

Glad you are happy with your HOA with over 500 in foreclosure. In my HOA there are none in foreclosure

[Johnynorthla]

Originally Posted by bmcgc

I was the treasurer at a 1740 property HOA.

IMO, this is the minimum research you should do when considering purchasing an HOA property.

1. Is the park a non-profit HOA or a for profit business.
2. Is there a paid management company or does the Board of Directors manage the property.
3. Ask to review the HOA financials. What is the history of rate increases, are special assessments allowed, how many properties are in arrears for HOA dues, what is the procedure for delinquent accounts. How much is collected each year in fines.
4. Has the HOA been sued in the past 5 years.
5. Review any contracts the HOA has entered into.
6. Read the Covenants, Conditions & Restrictions (CC&Rs), front to back.
7. Drive the property and see if the CC&Rs are enforced.
8. If you are cited by the HOA, is there an appeal process.
9. If you rent your lot and the renter violates the CC&Rs, are you liable for fines?
10. Review crime reports for the area.

If anything looks shady, run as fast as you can. Selective enforcement of the CC&Rs no cash reserve, a history of lawsuits, high crime, a non-existant dispute process, refusal to allow you to review financial documents, avoiding answering questions about management and a large % of revenue from fines usually means a poorly managed HOA.

You want your lot in a pleasent park that you can enjoy. You dont want to be in a police state where a team of enforcers are out every morning writing violations for anything they can find. That type of enforcement is to generate revenue and to project power, not to maintain a high standard of enjoyment and habitability for the residents. You also dont want people to ignor the CC&Rs with no consequences and turn your property into a low rent trailer park.

The more research you do and the better you educate yourself, the better decision you will make.

Excellent post! Not just for an RV lot but for any HOA!

[zzotte]

Before buying one you should spend sometime at park and see how things are two weeks minimum

Zzotte

[NTXNEWBIES]

Originally Posted by Teamfoxy

We own lots in two small parks in FL and VA. Both have HOA fees of $1k per year that cover water and sewer plus lawn mowing and road maintenance as well as care for the common areas. The FL park is our domicile and provides mail forwarding service. Taxes are $500 on each. Electricity is on us, but FL is billed through the park and VA is billed directly by the power company. Internet & TV are our responsibility in both. We use OTA tv and Sprint for phone/internet.
Both have restrictions on RV types and what can be built or placed on the lots. In both cases we have a deeded lot that we can sell or rent out to owners of RVs that meet the requirements. Some people rent out their spots if they want to travel and a months rent covers the annual fees. One couple we know alternates winters between FL and TX.
Do your homework on the park and make sure you pick a good one.

Curious as to how you would look for lots to purchase to begin with. Suggestions?