MOBILE HOME PARK FOR SALE
In this episode of The MHP Broker’s Tips and Tricks podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed Ed Bridgman, president of EOB Consulting and a go-to expert in thefield of RV communities.
This and every Tips and Tricks podcast episode is brought to you by The MHP Broker’s’ proprietary Community Price Maximizer. Use this four-step system to get the highest price possible for your mobile home park or RV community when you sell it through The MHP Broker. Guaranteed. Ask Max for details.
Here Are the Show Highlights:
Want to learn more about investment opportunities in RV parks and mobile home communities with a leading brokerage for manufactured home environments? Just drop Max Baker a line at info@themhpbroker.com or give him a call at (678) 932-0200.
Power Quotes in This Episode:
“I discovered that the RV industry is a 100-year-old industry, but it’s ramping up at a pace that would put any biotech company to shame. …the RV industry is just blowing up.” (Ed, 3:28)
“(An RV) community is less money to develop (than a resort RV community) because you don’t have to have two swimming pools, you don’t necessarily have to have a fitness center. These people are working adults, who want to come home and have a beer and go to bed and get up the next morning and go to work…” (Ed, 12:44)
“So, if you can anticipate where the next Disney World is going, by all means, buy all the land you can around the next Disney World.” (Ed, 16:00)
“So, do you want to babysit a resort–type guest? They paid more, but they demand more.” (Ed, 16:28) (A friend who owns an RV community) told me that…these RV campers, they’re really only made to move around 40 times, and then they just start falling apart. And he said, you know, once they get into my community, they don’t ever leave.” (Max, 16:58)
“You can also have a concierge service where you put their RV in storage, and then they call you and they’ll say ‘we’re going to be down the first of the next month,’ and you get it out of storage and set it up on the site for them.” (Ed, 27:25)
00:02
Hello and welcome to the mobile home park brokers tips and tricks. This is the podcast where we talk about mobile home park investing, because that’s what we’ve been involved in for the last decade. Let’s dive into today’s episode. Here’s your host, Maxwell Baker.
00:22 Maxwell Baker
Hey y’all welcome to another beautiful episode of the mobile home park brokers tips and tricks, podcast. As always, this episode is brought to you by the Community Price Maximizer. It is our proprietary system that will guarantee you a higher price. When you exclusively list your community with us. four step process, give us a call. You know the number, but I’ll say it one more time (678) 932-0200. Today, y’all I’m really excited to have a gentleman that I met, actually my wife met at the last SECO in 2022. His name is Ed Bridgman from EOB consulting. Ed has got a very unique skill, where he does feasibility studies and a lot more really, but mostly feasibility studies from what I understand, and what I’ve seen him do for RV communities, and the resort style communities and RV communities that became popular within the last 20 years. He’s the guy you call to make sure that it makes sense. So, Ed, appreciate you coming on the show. Tell us a little bit about your background. I’d love to hear how you fell into the RV business and kind of your history and then we can kind of open up that can of worms and see where it leads us.
01:45 Ed Bridgman
Well, first of all, thank you very much for allowing me to be on your show. It is an honor. Thank you.
01:50 Maxwell Baker
Yeah, man, no worries.
01:52 Ed Bridgman
Second of all, I’m an electrical engineer by training with a master’s degree in business. In 1990, I was winning some awards and creating some patents for Motorola, designing microprocessors and President Ronald Reagan created the Malcolm Baldrige Award. I am one of the five co-authors of the original Six Sigma. If you’re not familiar with Six Sigma, it’s all about reducing waste and creating a profit while exceeding your customer’s expectations. So that’s my background, is all about efficiency, and producing services and products that exceed customer’s expectations, while making a profit. So, I’ve been a consultant for about 30 years ever since we won the first Malcolm Baldrige Award, presented by Ronald Reagan, and helped probably hundreds, maybe 1000s of companies be more efficient, and produce a product or service that is more reliable and, and better for their customers. Then in 2010, I was actually the manufacturing CEO of a tiny home community, building tiny homes back when they were popular, or more popular than they are now. And there was a big oil spill out in the Gulf, you probably heard about it.
03:27 Maxwell Baker
Yeah
03:28 Ed Bridgman
It was in all the papers that BP Oil Company buying $24 billion $. And that money was supposed to be spent on the Gulf Coast for about 200 miles section of the Gulf Coast, in the tourism industry. And I said you know what I need to be in the tourism industry along the Gulf Coast and let the federal government send me my customers. So, I started doing a bunch of research. And I discovered that the RV industry is a 100-year-old industry, but it’s ramping up at a pace that would put any biotech company to shame. In 2010, they sold 247.3, new RVs and 2022 they sold 614.1000 new RVs it’s just breaking records nearly every year with a slight bump in 2019 and 2020 due to COVID Not because of demand slowed down but because they had to shut down the factories due to COVID for a little while. But the RV industry is just blowing up. Now we all have read some articles that the production is going to slow down a little bit in 2023 back to 2021’s level. Yeah that 2021 They sold 587.4 100,000 new RV and,
05:00
That’s, that’s a lot of RVs. But what’s really important to note is that in 2019, they only created 25,000 new sites to put these RVs on. And in 2021, They only created 81,000 new sites to put these RVs on. So even if we do back down the production, to 587,000, that’s still six or seven times more RVs, new RV’s being sold, then we’re creating new sites to put them on. So the gulf between the supply and demand of the people are purchasing RVs and choosing to live in RVs, longer and longer. And the prices to put these RVs when you’re using them, that gulf between those two numbers is getting wider and wider, even with the slowdown.
05:59 Maxwell Baker
Yeah, and it’s been interesting, because we’re starting to see these storage facilities pop up. And they are demanding a premium. So it’s either traveling around, or they’re being stored in the storage facilities. I know personally, for me, like, we bought one and we’re looking at a few other just because the writing is on the wall, just like what Ed said that. I mean, the sales is kind of like it’s just there like the math, the math is the math like where are they storing it most of these people that have these million dollar RVs live in HOA restricted neighborhoods, so they can’t just park it on the road or, or even in the driveway like they’re having to store it, or they are driving around the country, a lot of people sell them….
06:42
…So, tell us a little bit about kind of like the five different RV destination types that you wrote out here for me to kind of go over so that way people can understand, like, what’s been happening in the industry, kind of how it’s evolved. And we can take it from there.
06:58 Ed Bridgman
Well, I want to back up just a moment and say that ELB consulting, also designs, boat and RV storage facilities. I’ve been in the industry now for about 10 years, designing RV destinations. But most recently, I have learned through experience, that boat and RV storage facilities, compliment RV destinations, and often times, probably two out of three of the times that I am designing an RV destination, there is a boat and RV storage component to that RV destination. So, I’ve become quite good at designing boat and RV storage facilities as well…
07:47 Maxwell Baker
Nice.
07:49 Ed Bridgman
…So now to answer your question. I mentioned earlier that the RV industry is over 100 years old and I can back that up because these Airstreams that you see the silver tubes going down the road. Airstream celebrated 100 years in business in 2019, So they’ve been selling Airstream RV’s for over 100 years. And we’re all familiar with the park destination, when people are traveling, let’s just pick a location, Dallas, Texas, and they’re gonna go to Orlando, okay, well, you can’t make that drive in one day. All right, you’re just physically not going to be able to pull that RV and be a good safe driver for the 18 hours that it’s going to take you to do that. So, we are all familiar with right along the interstate right along an exit there will be an RV park. RV parks have been around for over 100 years are placed to serve as a resting place for the driver to pull over and refresh themselves, take a nap, eat something go to the bathroom, and then move on down the road. They’re designed for short term stays, RV parks make a note please, are the only RV destination that are losing money right now. Every other RV destination is making a ton of money. But RV parks are going down in value. A because the last five or six years, people have been traveling shorter distances and haven’t needed to pull over for a night until last year. Last year they started going further distances and I can explain that but also because of autonomous vehicles. It’s becoming less and less stressful to drive long distances as your automobile is letting you know if you get out of your lane and assisting you with the driving. The second RV destination is a campground. So, you’re going from Dallas to Orlando, I assume you’re going to go to Disney World. Not far from Disney World. There is a campground.
10:00
And you’re going to stay in the campground, you’re going to sleep in the campground. You’re going to avoid hotels with bedbugs, because you brought your bed with you, but you’re going to be entertained during the day at Epcot Center and Disney World and stuff like that. So, the campground has very few amenities. It’s designed for a little bit longer term than a park, usually one to two weeks at the most. But the amenities are nearby, you know, a lake, or the Grand Canyon or Mount Rushmore, Disneyworld, something like that. So, parks and campgrounds, that’s where RV’s have been going for over 100 years. But in 2017, the average RV sold for $109,000. And people were looking at their kitchen window at their RV sitting in the backyard, and they’re like, Man, I gotta use that thing more than a couple of weeks out a year. To get my money’s worth, I need to use that thing like every month or every other month at least. But I don’t have two weeks of vacation to travel to some destination 18 hours away, I’ve got to go a shorter distance where I can leave Friday afternoon after work and get back Sunday night, so that I can go to work Monday morning, and about 20 years ago.
11:21
Thus, created resource, people can buy 20, 30, 40 acres of farmland out in the middle of nowhere. And if they were within 50 to 100 miles of a major metroplex, people would bring their RVs to them for a weekend and stay for three or four days, maybe five days or so. But the difference between a resort and a campground, the resort you have to provide the entertainment there is no Mount Rushmore in your backyard, there is no Grand Canyon, you’re gonna have to provide a fitness center, adult pool, child pool, frisbee, golf. You’re gonna have to have karaoke night and, and potluck dinners on Sunday afternoons before people leave, so that you can attract people there, there has to be a reason for them to come out to the middle of this field, and stay with you for three or four days. So, resorts require more camp workers to help you with all these amenities, you’re going to have to provide more amenities, they cost more to develop, because you’re going to have to have one or two pools, you’re going to have to have a heated and cooled climate-controlled fitness center, maybe basketball or pickleball, or something like that. So that’s the resort.
12:44
Then I asked 15 years or so people started, especially the millennials, people started choosing to live in their RV full time, or at least six months out of the year. So, we have snowbirds, we call them coming down from north and staying for six months at a time in the south. And so, they’re living in their RVs. And, and they’re not just staying there for a weekend or a week or two at a time. They’re staying in their RV’s for months at a time. And so, we develop communities, and the community is a place just like a brick-and-mortar community will you need to be halfway close to a grocery store,a bank, some Dollar General and Ace Hardware, you look for safety, you look for quiet, just like you would a brick and mortar community close to maybe a school. So, a community is less money to develop because you don’t have to have two swimming pools, you don’t necessarily have to have a fitness center. These people are working adults, who want to come home and have a beer and go to bed and get up the next morning and go to work…
14:09 Maxwell Baker
Yeah.
14:10 Ed Bridgman
…They’re not necessarily getting up the next morning going to Disney. So that’s a community. And then more recently, only within the last few years, we have hybrids. And the reason that developed is because we can’t, it’s not possible to develop communities fast enough to satisfy the demand. So people are taking parks and campgrounds that were designed for other reasons. And they’re using them as communities. So the proof of that is, we all are familiar with along the interstate. We were on our way to work or on our way to someplace. We drive by this park pretty regularly. And we look over and we see the same RV sitting there. Every time we go by.
15:00
They’ve got a wooden deck backed up to it, and they’ve got flowers that are growing around it and the tires are flat. I mean, that RV hasn’t moved in years. Okay! That’s because they’re taking a short-term location and creating a long-term solution. We don’t have anybody taking long term solutions and making a short-term solution out of it. It’s the other way around. The demand is for long term living. So, once you wrap your head around the fact that there are five different RV destinations, your next question is, well, which one should I avoid making, I already said parks, don’t make a park, which one is, is going to be the one that I should consider making? It’d be great if you can make a campground. The problem is you can’t buy land across the street from Disney World. And if you could buy land across the street from Disney World, you wouldn’t be able to get the permit to build an RV destination…
15:58 Maxwell Baker
Yeah.
16:00 Ed Bridgman
…So, if you can anticipate where the next Disney World is going, by all means, buy all the land you can around the next Disney World. Okay, but they usually don’t advertise that very much in the future. So, it’s easier to make resorts and communities. So, it just depends on which guests type you want to babysit, because that’s what you’re going to be doing. It’s just baby setting. But…
16:27 Maxwell Baker
Yeah.
16:28 Ed Bridgman
…So, do you want a babysit a resort type guest, they paid more, but they demand more? Or do you want to babysit a community type guest, they paid a little less to be there. But for the most part, you escort them to their site, and you never talk to them again, you know, once a week or something when you’re delivering their mails. Other than that, you never see them. So, depends on the type of person you want to babysit…
16:58 Maxwell Baker
Yeah, no, and I understand that completely. You know, I’ve been told by my I have a friend of mine, who owns a nice community, I would say now that I’ve been educated by you, he told me that he’s like, man, these RV campers, they’re really only made to move around 40 times, and then they just start falling apart. And he said, you know, once they get into my community, they don’t ever leave. And if they do, they end up coming back. And because they’re either a contractor going back to wherever they their original home was, but then they come back and they can work. And they live in my community. In their little camper, and their dually, So he was saying he’s got a lot of those dually camper visitors over there. So, I’m just curious if you’ve had any feedback on that estimate that they’ve been, they’re really designed only to be moved around 40 times. And then also, the other thing I was going to lead into is this, this point that you have about the electricity, and how the demand for that is going up, and how the newer RVs and campers are starting to demand more and more things. And obviously Tesla is a big consumption of electricity, because they are an electric car. So just wanted to see what your thoughts were on those two different key points.
18:10 Ed Bridgman
Well, those are two very different key points. So, if I can address the first one…
18:15 Maxwell Baker
Yeah.
18:16 Ed Bridgman
… First, RV’s, the smaller RV is your pop ups that we’ve all been familiar with for 50 years, the smaller RVs maybe they don’t have slide outs. They are designed to be moved around more. So, the RV industry is evolving, like and that’s a really stupid statement because every industry is evolving. But the RV industry is evolving in such a way that it’s, it used to be one size fits all ergo, the airstream, for example, there’s no slideouts it’s just a silver tube going down the road. We mentioned that earlier. But nowadays, you have RV manufacturers that are focused, and there’s a fork in the road, and some of them are more focused on smaller, more rugged RVs now even advertise that you pull this thing behind a four wheel drive Jeep, and you take it up into the mountains and you boondock, the word boondocking means that you’re not hooked up to electricity or not hooked up to water and sewer, you’re roughing it, okay? And these things are built to be able to take being hauled around up in the mountains. So those would be the exception to your friend’s rule. On the other hand, the larger especially fifth wheels, fifth wheels are specifically being built now to act as a second home. And it’s true. You don’t want to hold those things all over the country. They’re huge and they’ve got five slideouts and they’ve got three air conditioners on top and an air conditioner weighs more weight on top of this flexible ceiling and it’s being bounced around when you hit a bump or hit a pothole and exponentially the weight of that air conditioners putting a lot of pressure on that ceiling, which can create small cracks that create water access points. And water in the roof is the Achilles heel of any RV. So, I mentioned before the RV industry is evolving, and they’re changing the way they design RVs. But the RV owner is evolving much faster…
20:32 Maxwell Baker
Yeah.
20:34 Ed Bridgman
…Since COVID Especially the RV owner is demanding things that the RV industry hasn’t even been able to keep up with. So, more and more people are living full time in 2020. Yeah, 2021 2020 I can’t remember, the average brick and mortar home was $300,000. And the next year, whether it was 21, or 22, I can’t remember, the average brick and mortar home went for $370,000. And now we all know that its tracer going through the roof too…
21:09 Maxwell Baker
Yeah.
21:10 Ed Bridgman
…for the first-time homebuyer or for that person who wants a second home like a like a northern home and a southern home, they can’t afford to build another brick-and-mortar home. So instead, they’re buying RV’s and leaving them in the south. So even if they haven’t brick and mortar home up north, rather than pulling it back and forth and paying for the fuel, just so that they can store it up north, they’ll buy it in the south, they’ll leave it in the south, they’re living in the South in the wintertime, and then they’ll store it in the south, hopefully in the same place. Ergo, that’s the reason why I’ve been designing boat and RV storage facilities as part of my RV destinations. Because the guest is leaving their RV in storage for six months at that location, and then living in it for six months at that location and only gets moved back and forth, you know, a few 100 feet from storage to the site. So yes, those are specifically made to be homes, and they are not well adjusted to be drugged all over the country and, and on rough roads, or up and down mountains and stuff like that. That’s not the way they’re built…
22:28 Maxwell Baker
Yeah.
22:29 Ed Bridgman
…So that answers the first part of your question.
22:32 Maxwell baker
It does. I think that’s pretty much what I was trying to get out just because I just heard that through the grapevine talking to him. But as far as your development or your feasibility studies for designing the storage facilities, I mean, the ones I’ve seen are pretty, I mean elementary man, I’m thinking you’re probably doing a little bit more, a little fancier stuff, because the ones I’ve seen are like gravel with a chain link fence around it. That’s it.
22:56 Ed Bridgman
Well, we want to come back to your electrical question. Let’s put a pin in that make sure we get back…
23:01 Maxwell Baker
Yeah.
23:02 Ed Bridgman
…The barrier to entry when I am designing an RV destination, specifically an RV destination. The thing that is that must be overcome, the barrier to entry is the sewer. So ideally, you want to be on public water and public sewer. But in order to get your permit, it’s very difficult to find 20 acres or 40 acres inside the city limits that you can get permitted for an RV industry, is pretty much impossible. So, you’re going to be outside the city limits and usually outside of the jurisdiction of the local public sewer plant. So therefore 90% of the RV destinations that I develop are on septic. So, with septic you’re not allowed to put asphalt or concrete over the permeable lines. The septic lines have to be able to be under just grass, so you have to put them under a dog par, under petting area,we have petting zoos or something with your RV destination. But oftentimes that boat and RV storage facility, you can get by with putting your permeable lines up there in that area. And then you put gravel on top of that instead of asphalt because making a concrete parking lot that say you know 500 feet by 250 feet. That’s a lot of concrete. So…
24:38 Maxwell Baker
Yeah.
24:39 Ed Bridgman
…I’ll put concrete under the buildings, but especially if that’s where I’m hiding my septic lines. I put them up there in the boat and RV storage corner usually. But yes, boat and RV storage facilities have become well you can have whatever you want. You’re the entrepreneur you tell me what you want me to
25:00
build, but a lot of people now are choosing to build a boat and RV storage facility that is climate controlled, that is lockable, they’ve got a coach, that they’ve spent between 750,000 and $2 million on, you can back it into a pole shed and make sure it hasn’t cover on it, that’s a given. Because as I mentioned earlier, the Achilles heel of an RV is the roof, water access to the roof…
25:28Maxwell Baker
Yeah.
25:30 Ed Bridgman
…So, you got to have it under caution. But you can have some sites that are pole shed, and then you can have some sites that are climate controlled. And I’m designing one right now, across the Bay, and the Gulf Shores area, that the gentleman each site is large enough that you can actually open up your slide outs, it’s climate controlled, you can store stuff in there. And so, the idea is that people can come and they can actually use their RV inside the storage area. Or they can at least clean it, open it up and clean it renovate whatever they’re going to do inside the storage area, or maybe their family can use it without getting it out of the storage area. So that’s becoming more and more popular. I’ve even built one. I wanted to say this was popular, but I built one where we built an apartment on top of each RV storage site. And you had an RV down below that can open up and you can put family members in your RV and then there was an apartment upstairs. That gentleman had a lot of money. But anyway, boat and RV storage in conjunction working with the RV destination is really becoming popular, very, very, very popular to keep that guest from leaving. I have a lot of guests here at Homestead RV community and Theodore Alabama, my I own my own RV destination. And we’re about 65% long term guests, I probably have 10% of those guests don’t have a truck, they don’t have a way to pull their RV, they bought their RV brand new they had it delivered to my site. And they have no intention of ever, ever moving it…
27:24 Maxwell Baker
Yeah.
27:25 Ed Bridgman
…And that’s what was me, okay, as long as they pay their bills, that’s, that’s fine with me. So, you can also have a concierge service where you put their RV in storage, and then they call you and they’ll say we’re going to be down the first of the next month and you get it out of storage and set it up on the site for them. You could do that if you wanted to.
27:50 Maxwell Baker
There’s a lot of different ways you could do it. It sounds like there’s a lot of variables and I mean, its you guys are trying to do it on your own, probably not the best bet, especially if you’re trying to do something that is at any scale. The biggest thing here is like if you guys have got an RV idea or some land that you’re looking to develop, like at any kind of scale, like ELB consulting can help you with that. A lot of different variables that seems like he had mentioned the concierge service and a lot of different things that Ed can do to help. So Ed we’re getting to about 30 minutes here, just wanted to see if you had any closing comments about what you do. And if you want to have some people reach out to you to kind of explore some ways that you might be able to help them, just wanted to get your feedback on that and see how people can get a hold of you.
28:41 Ed Bridgman
Yeah, EOB consulting, I can maximize the value of your property, I come out and physically walk your property with you so that I can gain an understanding of your vision. There are other consultants in this area, if they don’t come out and see the unique qualities of your property and listen to your vision, don’t use them. I, then do a competitive analysis of everything around your RV property destination, whether it’s boat and RV storage, or an RV destination. And when I leave there, three days later, I know everything there is to know about your local market. I know exactly what is the demand, I know exactly what we’re going to be able to charge. I have a very good estimate of what our occupancy rate is going to be each year. And armed with that I put together a site layout design. We go back and forth a couple of times with the client and make certain that they approve the design. It’s what they want to build. For example, we talked earlier about communities versus resorts. They are designed completely differently.
30:00
Depends on the owner depends on who they want to babysit, and what they want to have. So, we go back and forth until we get that and then I create a construction cost estimate. And we work with the client, because maybe the client has a brother-in-law that is in the dirt excavating business, and he can get that at a much less rate than what I’m used to paying around the country. But because I do three or four of these a month, I have a pretty good estimate of what these construction costs are going to be, when we work together. And we come up with a construction costs, combine that with the occupancy rate, estimate the revenue generation estimate, operating cost, both fixed and variable costs, create a 10 year cash flow analysis. That is what your investors, either private or public investors are going to require, how much money you’re going to need, when am I going to get my money back? What’s the risk involved? Those questions are all answered by EOB consulting, you can get more information about that by reading step by step it’s on my webpage at www.eob-consulting. The dash is not spelled out, it’s just the line between the B and the C. So that’s www.eob-consulting.com. If you go to that website and read step by step, you’ll understand the steps required to go from raw land to a turnkey operation. My phone number is there at that website also, but it’s 512-785-1379. Again, that’s @EOB-consulting.com. And my phone number is 512-785-1379.
33:01 Maxwell Baker
Ed thank you so much for that. And as always, y’all the reason why we do these podcasts is so we can add as much value to your operations, to your communities, and ultimately, your wallets or much money as we can in your pockets at the end of the day. So, like I said before, this episode is brought to you by the Community Price Maximizer. It is our proprietary system that will guarantee you a higher price. When you exclusively list your community with us, give us a call (678) 932-0200 or email me info@themhpbroker.com. Ed, thank you so much for joining us. We’re grateful for your time and let’s keep moving forward.
Bio
Ed O. Bridgman is an Air Force veteran with a background in Electrical Engineering and an MBA. While an Electrical Design Engineer he co-authored “Six-Sigma Quality Initiatives” earning Motorola the 1st Malcom Baldridge award from President Ronald Reagan. He has been a Six Sigma consultant for 30 years helping companies in a variety of industries reduce operating cost and increase profit margins while exceeding customer’s expectations. www.EOB-Consulting.com. For the past several years Ed has been consulting for the RV Industry preparing Feasibility Analysis, Business Plans, Site Design Layouts and Project Managing the construction of RV Parks, Campgrounds, Resorts and Communities as well as Boat and RV Storage facilities. Ed helps people “Maximize the value of their land.” In 2021 Ed opened Homestead RV Community www.HomeRVC.com as his “Flagship” employing forward thinking features including the ability to automatically monitor both electrical and water use at every site and building for every reservation (short-term and long-term) and adjust the guest bill automatically.
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