Happy Camper Capital: Investing In RV Parks With Don Spafford

ICWI Don Spafford | RV Parks

The rising inclination toward outdoor recreation, such as camping, sports, and tourism, is poised to drive market growth for RV parks. As such, it can be a perfect space to start investing. In this episode, Don Spafford from Happy Camper Capital shares his wisdom on investing in RV parks. Some investors that may not want to invest in other types of real estate but would invest in campgrounds. Don tells is why this is the case. He explains how campgrounds have a short-term return at scale. He also reveals that they don’t focus solely on rents because properties have at least ten different income streams. Tune in to this episode to hear more insights from Don before you invest in RV parks!

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Happy Camper Capital: Investing In RV Parks With Don Spafford

Our guest is Don Spafford. Don has an educational and professional background in finance and security investing. He also held several management leadership positions in corporate finance before jumping into real estate. In 2021, he joined Happy Camper Capital, where his team focuses on syndicating RV parks. As our readers know, I am very bullish on this space. I’m super excited to have this conversation. Don, welcome to the show.

Thanks, Matt. It’s my pleasure. I love being here and talking about this.

We like to start with the difficult questions here. What’s your favorite ice cream?

For many years growing up, my favorite was always a mint chip, but in the last few years, it’s blueberry pomegranate chocolate chunk, which can be found at some Kroger retailers. It disappeared locally, which is unfortunate, but that has been my favorite one.

That is a very niche ice cream. You’re in Idaho. Do they have blueberry pomegranate chocolate chip in Idaho? Where did you find that?

It’s a chocolate chunk. It’s one of the Kroger brand ice creams. Any Kroger store used to have it. I haven’t seen it for a while in the local one here that I used to buy it from. I don’t know if they stopped making that specific flavor here locally. You can find it at a Kroger store. Try it out.

I am going out to the grocery store later. There’s a Kroger two minutes from me. Hopefully, they’ve got it there. Don, tell our readers what’s the scoop. What do you do?

My main focus is on Happy Camper Capital. We purchase RVs, resorts, campgrounds, and marinas across the country. We do this for several reasons, which we will get into, but primarily, it’s because the cashflows and returns are excellent and then also because they’re a lot more fun than multifamily, self-storage, or anything else. That’s my main focus. I have several other things I do outside of that. I’m involved with another team that does ground-up build-to-rent multifamily. I’ve got a couple of JV deals. I’ve got some commercial development for retail space and some across the board on multiple different things here, but my primary focus these days is with Happy Camper Capital.

For our readers out there, you’ve got a little sign right behind you that says, “Invest where you play.” That’s why I’m super interested in this space because we were chatting beforehand. I took a sprinter van tour through Oregon earlier in 2022 and got a chance to see the different campgrounds out there and the different experiences you have. That’s where my mind went, “Why don’t I buy one of these things and be able to invest and play at the same time?” Before we get there, where did your real estate journey begin?

My background is in Finance Investment Science Portfolio Management. I graduated with that degree in 2008. It’s the worst time to graduate with a Finance degree because finance jobs were being laid off or going out of business. I luckily had a job at the time. I stayed on there where I was but didn’t quite get to fulfill my dream at that point to go on to become a financial advisor, portfolio manager, or something along those lines. I studied for the CFA exam and other things, but then I was like, “What’s the point of this if there are no jobs?” I took a turn and made a shift back to accounting.

ICWI Don Spafford | RV Parks

RV Parks: 2008 was the worst time to graduate with a finance degree because everything finance jobs were being laid off or going out of business.

I went back and got an Accounting degree. I planned to study for the CPA exam instead, but family needs at the time made it very difficult to set aside time to study for those things. I decided to stay content with where I was at the time and figure it out later. Years ago, my wife became a realtor. At this point, we lived in Omaha, Nebraska. Some of her very first clients were investors. That’s when my mind started to consider more real estate investing than stocks, as I previously had done. That was where the starting point was, but I did not know where to start or how to begin. I still was lost.

I still had the mindset that most people have that real estate investing is for the ultra-rich and wealthy. The average person can’t do it, but I started learning. I discovered that you can. It took several years after that before I could make that happen. I still didn’t have a large amount of money to put down for a down payment. Most people assume or are taught that you need a 20% to 25% down payment on an investment property. I later discovered after I moved to Idaho at this point that you don’t necessarily need that much. I found there are lenders that can do a 10% down payment.

There are other things you can do, like house hacking and different things but aside from that, buying a pure investment property. I found a local lender for me that would do a 10% down payment and borrowed most of that down payment from my 401(k) to make that happen. That was to buy a fourplex in 2017. The reason I went with that is mainly that I knew I wanted to get into real estate. All my research analysis and things I’ve read and studied indicated that multifamily or multiple doors were the better option than going single-family.

I saw it from my perspective as the risk aversion side of it. It’s also less risky having more doors than a single-family. I’ve got to pay the mortgage. If I have to replace the carpets, that pretty much wipes out my income for a year, probably. I was like, “If I have a multifamily, at least a fourplex was the most I could go for at a normal residential loan.” I got a fourplex, assuming that, most likely, it’s not ever going to have all four units vacant at the same point. I was like. “As long as two of them were in there, that should at least be enough to cover the mortgage.”

That was my starting point. That’s what got me past that hump to least get started and get things going. Luckily for me, it was a home-run property. I still own it. I refinanced it to pull out way more than I put down and reinvested that to continue to multiply that income. That property is now cashflowing infinite returns. Because of the lower interest rates, I raised the margin on it, but it’s still cashflowing now than it was before I refinanced it. It made no difference on my cashflow, but I pulled out six figures to reinvest in something else. One of the great benefits of real estate is that you can build up your bank within it if you do it properly.

One of the great benefits of real estate is that you can essentially build up your bank within it if you do it properly. Click To Tweet

I’m jealous that you found multifamily first, unlike most of us who went down the single-family route and got our shins kicked in for a couple of properties before we realized that scale matters. You’re the first person I’ve had on the show that borrowed from their 401(k). During 2020, they had some provisions out there. You could do that with no penalties and things like that. Can you talk us through that process, why you decided to do that, and some pros and cons against it?

I did this in 2017 before that 2020 thing. There was also some fear in there. I wasn’t sure of all the advice you hear from people, “You don’t touch your retirement accounts. You’re crazy. Leave it alone. You need that for your retirement,” but the way I looked at it was my 401(k) balance wasn’t that great. It wasn’t growing that great. There were ups and downs. There were times when it had great returns, and there were times it didn’t. I had very little savings at all, if any. I had more debt than anything else.

Honestly, that’s why I saw real estate as my only option as my saving grace to change our current situation to have a better future than to continue down the path I was going, which would probably end up in bankruptcy because of the way things were going. I needed to produce more income without necessarily working more hours and building wealth at the same point.

I learned that you could borrow from your 401(k). I’m not talking about withdrawal or distribution, which would incur fees and taxes. I borrowed from myself. I have to pay it back. Most 401(k)s allow you to borrow for real estate anyway, especially for your primary home. If you borrow for your primary residence, you can extend it out for 30 years. In my case, I had up to five years I could choose to pay it back. I choose a maximum of five years to pay it back.

It gets paid back with interest, but the interest goes back to me anyway. I’m paying myself to borrow for myself. It was pretty much my only option to get the money I needed for this down payment. Luckily, it was only 10%. I only borrowed $20,000 from my 401(k) and made up the difference for myself the extra $6,000. I put $26,000 down to the fourplex, which is now worth three times more than what I paid for it.

Knowing that I needed to get started and that there was no other option, to me, it was like, “What else am I going to do?” It’s one of those things that’s either going to work or fail. I’ve got to take that chance or that risk. I trusted my calculations from my analysis of the numbers. I was like, “This is going to work. It has to work. The only way it’s not going to work is if I make it fail by not managing it.”

ICWI Don Spafford | RV Parks

RV Parks: The only way it’s not going to work is if I make it fail by not managing it.

It was my property and my family at stake. I made sure I did everything I could to make sure it did not fail. We have succeeded with that. Once I learned that I could borrow my 401(k), that was a light bulb moment. I was like, “I can get into this sooner than I thought. If I try to save up enough money, even at a 10% down payment, it’s going to take forever. I would probably never get there.” This is the best way for me at that moment to get started.

I can’t necessarily advise that for everybody. Everybody’s personal situations are different, but at that time, it was my best option. I do not regret it or look back and wish I had done something different. It was the starting point for everything I was doing. The value of that property and what I’ve pulled out of it already are worth more than what my 401(k) balance is with that loan paid back at this point. It’s well worth it.

Every 401(k) plan is different. This might be individualized to you versus a broadband sweeping rule of thumb. Did they securitize or collateralize that amount of money, set it aside, and allow your stock positions to keep growing? Is that money pulled out of the market because you sold the assets, and they hold that money in cash? How did they do that?

In my case, they sold the assets for that value of whatever equal distribution between them and then pulled it out. That money was not earning while it was out, at least in the 401(k). It earned more than that anyway, so I don’t care. I would pull the whole amount out if I could. It’s not like the infinite banking concept that uses a health or life insurance account where you still build dividends while it’s using it. I would do it again if I had to.

The second thing was this. Were you still allowed to contribute to your 401(k)? Did you have to pay back the loan first?

I was still contributing. I lowered my contribution amount since that loan is automatically pulled out to pay back from each paycheck. I lowered my contribution amount to more or less offset that so it didn’t affect my actual living income too much. That’s what I did to make that happen. I was still contributing to it while it was also paying itself back.

For our readers out there that may have gotten lost in all that, in certain instances, you could collateralize an asset and allow that asset to continue to grow. In this situation, they took down some of that and sold some of the underlying assets to give you the loan, which means that part wasn’t growing, but you were still able to contribute to the 401(k) while the other part of your 401(k) was allowed to continue to grow while you paid back the loan. You’ve got this fourplex. You’re making a killing on it. How did you get involved in camping grounds?

It was not the direct beeline direction. I didn’t go, “I’m going to buy my fourplex. I’m going to go buy some campgrounds.” In the standard journey of most real estate investors, you sit out on one path, and then years down the road, you end up somewhere else you didn’t expect to. When I started with that fourplex, I had no idea about getting into bigger commercial properties. My ultimate goal was, “I would love to do that,” but at that point, I was still thinking small scale. I’m like, “I can’t do that. I don’t have the resources, the connections, and whatnot.”

At the starting point, I didn’t know how to do that, but I was on the path to continue buying more fourplexes. It took a year and a half before I bought anything else. I got a couple of more fourplexes. During that time period, the connections I was making with people were the primary thing that launched me to where I am now. It was making those connections, networking with people, and getting on investor lists, wholesale lists, brokers lists, and all these different things. That led to different opportunities that happened to come up.

The primary thing that could launch you is making those connections and networking with people. Click To Tweet

How I ended up in campgrounds specifically was probably about early 2021. That’s when I increased my networking game. I started doing a lot more, especially virtual networking. That came to be during 2020 and 2021. I was able to network with a lot more people across the country who I would never have met otherwise. I started getting more involved with other syndication groups and understanding more about how to do syndications and how to get involved with them, and at this point, knowing a lot more people that are doing it.

I was able to see more opportunities to invest in those types of deals. I started looking for ways that I could bring value to a group. I still didn’t have a lot of money to invest in the other syndications. If I find a great property, I can take it to one of these groups and say, “Here’s this property I got. I’m happy to come in as a small percentage of GP to share this with you. Do your thing so I can learn the process.” That was my initial goal. I wanted to find a property I could syndicate with somebody or, if nothing else, a smaller-scale property I could JV with somebody.

I had some other people willing to JV with me on something, but in everything I looked at, the returns were not satisfying my expectations for what I wanted to get out of it. I saw it as a bit too risky to ask somebody else to put their money into it. I was being patient. I kept looking for better returns. I was like, “There has to be something better out there.” During this point, the markets went crazy. Everybody and their grandma were doing this syndication. There were twenty offers on every property. You have to outbid everybody else and have a very strong offer.

“Your earnest money goes hard on day one.” How are you going to compete with that? That doesn’t make sense. I was like, “Let me go back to looking at other people’s deals. I’ll invest as an LP investor in somebody else’s deal.” Based on my expectations, which goes back to the very first fourplex I bought and the high returns I was getting from it, I was like, “If I’m getting 40%-plus cash-on-cash on a fourplex, I want at least double digits on a multifamily or a bigger apartment building.”

I was not getting satisfied with a 6% to 8% cash-on-cash return and 2X multiple over five years. That’s not good enough. I kept searching and looking at other asset classes to see where it could be out there. During this time, I listened to a lot of podcasts every single day. I was working my W-2 job. I would listen to podcasts all day while I was working. On one of these podcasts, it happened that somebody mentioned RV campgrounds as an investment option and the returns they were getting on it.

I was like, “That sounds interesting.” I’m in Eastern Idaho. It’s about an hour and a half away from Yellowstone Park. It’s a very high camping area with mountains, lakes, and things. Everybody around here has campers and RVs. I saw this as a unique opportunity. My initial response to that and hearing about these campgrounds not having the connections or knowing anything about it was to go and try to do it myself.

I started going to different meetups and webinars and talking about campgrounds to connect with people in that space and people that were looking to buy. I put myself out there to be boots on the ground. I could go to their property to take some videos and pictures. My wife is a realtor. We could help with the purchase, assuming there has to be someone that wants to buy something here near Yellowstone.

In doing that and networking with people in that space, I met a couple of guys based out of Denver who had closed their first property and was looking to grow and expand their team. We discussed the returns they were getting and the goals they had in the long term of where they wanted to go with the company. I was still looking for partners. Going back to even that multifamily stuff, I was trying to find partners. In talking to these guys, everything seemed to align. Our goals were similar. Our personality types seemed to work well.

They invited me to join them. That’s Happy Camper Capital. I came on initially with them, helping with investor relations. I unintentionally scaled up what I was doing with them to more or less prove my worth. Eventually, within six months or less, I was invited to join them as one of the partners in the company. That was not my intention or desire, but I was trying to do everything I could to grow the company and do my part to go above and beyond. They were happy with my results and my enthusiasm for the company. That’s how I end up where I’m at now.

Beyond seeing some of the opportunities given the location where you lived, was it the returns that attracted you? Was it the fact that it was a pretty niche opportunity? Did you invest in one of these opportunities first? Talk us through that process.

Initially, the returns were what got my attention. We were talking double or triple what I was seeing in anything else as far as cashflow. My number one goal has always been cashflow first. The equity gains are great and all that stuff, but my ultimate goal was cashflow because I wanted to eventually replace my W-2 income. The only way I can do that is with consistent cashflow. I don’t want to wait five years to get a big equity boost and have to wait during that time. I want cashflow now.

ICWI Don Spafford | RV Parks

RV Parks: My number one goal has always been cash flow first.

These properties tend to produce, on average, about a 15% cash-on-cash or more. That caught my attention. Other things are around 6% or 7%. I was like, “That’s incredible.” I could get to that cashflow point I wanted much sooner with less money out of pocket than investing in multiple other syndications and trying to find other properties that were pretty impossible to get. We even submitted offers on other fourplexes and things, but we always got outbid.

I saw there’s a very cool opportunity. On top of that, what got me thinking more about it was what potential is here. Because of where I live, a lot of the neighbors have campers or RVs. They go camping all the time. I talked to many of them in the past about investing with me in some multifamily deals. None of them were interested. It’s not something they understand. They don’t get it. It’s outside of their knowledge base. They’re safe and comfortable with their IRAs. That’s it.

When I approached some of them before I joined Happy Camper Capital, I was doing my research outside of that. I was asking my neighbors, “What would you think about investing in a campground?” It’s a surprise to me that they were all excited about it. This is something that they use. They understand it. It’s like what you were saying about your experience visiting those places in Oregon. It’s something they use. They’re like, “I can invest in that? Why not?”

It’s why I use the tagline, “Invest where you play.” I liken it to the fact that if people love Apple, iPhones, and all that stuff, they should invest in Apple stocks. It’s something they use. They love it. Why not invest in it? It’s the same type of thought process as that. I saw that there’s possibly a unique niche of investors that may not want to invest in other types of real estate but would invest in campgrounds.

Most people who own RVs or campers are typically higher-income people in a way to be able to afford that type of luxury item. I was like, “Potentially, the users of these campgrounds could be our investors in those same properties. This is something worth exploring and at least giving a try.” I didn’t know what would happen or could happen when I first joined it, but I saw the opportunity and did not want to regret it five years later, looking back and saying, “Why didn’t I give that a try?”

There are two things I want to pull out of there. One, you talked about investing for cashflow. I’m a guy on the internet. Don’t take advice from me, but I completely agree with that. If you’re trying to get to financial independence, you need to be thinking about cashflow first and income that you can receive off your assets before you start thinking about appreciation, tax plays, and all those sorts of things. Once you have a steady income stream coming in that provides for basic necessities, then you’re playing a different ball game, where if you bury the money in the ground into a development project, then hopefully, five years from now, it’s worth more.

The second thing I wanted to say was about this idea of campgrounds. It is short-term pricing and short-term returns on a scale. Because you have dynamic pricing, you could charge for different types of experiences, whether 4th of July, National Park passes, or anything like that. It also interests me in the number of income streams you can get off of a property as well. When I was out in Oregon, for instance, we had the opportunity to buy internet or not buy internet and buy a shower or not buy a shower and different things like that. What are you all doing with your properties to secure more income streams from the asset itself?

On average, most properties have at least ten different income streams. We’re never relying solely on rent. With multifamily, pretty much your rent is the number one thing. Maybe there is some laundry income, pet fees, or something, but aside from that, your primary is depending on the rent. In this case, we are too. That’s still our primary income, but the other income sources add additional to that. We want the experience. We want somebody to come back over and over again because they have fun. They enjoy being there and bringing their friends and family.

It’s not just a place to park your camper and sleep overnight. That’s not what we buy. It’s much more like an RV park. There are different types of classes in the RV industry. You’ve got your side-of-the-road place where people pull over to sleep and move on the next day. You’ve got your RV parks that are more like long-term stays or mobile home parks. We have our RV resorts and higher-end destination campgrounds. That’s what we are in that space.

What you said was exactly right. I tell people to consider why these places earn so much income. It’s because it’s a short-term rental at a multifamily scale. With that, the income produced on each spot is going to vary based on the day of the week, the time of the month, or the time of the year. Around holiday times, it goes up. As they get more filled up, demand goes up. Those renting spaces go up in rent. On top of that, there are typically other things we have going on. You’re not just coming here to camp and cook some s’mores.

Consider why these places earn so much income. It's because it's like a short-term rental at a multifamily scale. Click To Tweet

We have, in most cases, some type of water feature at a lake or river, so we can have boat slips with the dock. People go boating. We have an aqua park there. People are out on the giant bounce house thing on water that they pay to use. In some cases, we have concert venues. We will bring in concert events for weekends or summer concerts to bring people out there that may not even be coming here for camping, but they’re going to come here for the concert. While they’re there, they spend money on the convenience store, the restaurant, or things that are there on site.

In most cases, we have some type of convenience store that sells goods. People are going to need snacks and whatnot. We may possibly have restaurants. We don’t necessarily run the restaurants, but we rent out the building to a restaurant that runs it and does a lot of stuff. We don’t want to have anything to do with the food prep stuff. We could have golf cart rentals, ATV rentals, or horseback riding. They pay to use the internet.

When we take over a property, one of the things we are implementing is to charge back the user for the electricity they use, the water, sewer, and all the utilities. If we can charge back, we’re going to charge back. In particular, we know that there are more electric vehicles coming through. We want to make sure that those electric vehicles are being charged for the electricity they use because they could suck up a full month of usage in one night. All those things are going to add back to our income streams. You get the laundry facilities, bath houses, and all those things.

There are multiple different things that we could do. What’s great about it is there’s an almost unlimited upside. As far as what you can think of to add something on, you can do something there and bring in more income. Some properties would be more seasonal than others, like in cold climate areas that have snow. You may think there are not as many people camping during winter. That may or may not be the case, depending on what’s going around there.

People still go skiing or ice fishing and stuff like that. We have a property in Iowa where we are doing a drive-through Christmas light display on the property. There may not be as many campers there, but people will still come and pay to drive through and see Christmas lights. We’re still bringing in another income during that off-season. There are multiple things you can do and think of to capitalize as much as you can on these properties.

I love this asset class because you can secure so many different income streams from it, but my mind goes to how people will pay for experiences. Do you think if we drove our RV all the way across the country with our two little ones and we were there for a month that they are not going to pay to swim in the lake, be on a boat, or do horseback riding? They are. They spent all this money to be there. They’re going to have the experience. In the food service, you lease out the building, which is genius. Do you also run the services like boats, ATVs, and horseback riding? Do you subcontract that out as well and pay a fee for them to perform their business on your property?

It depends. We have done both. In most cases, the boat docks are there for people to have their boats and pay for the boat slip, but there may be other cases where we will see an agreement with a local business that maybe does some excursions to take them out to go fishing. In that case, that’s usually their boat and their business. They pay us to use the space to provide that to the people there.

I can’t give a blanket statement because it’s going to vary by property and what makes sense at that property to do, and what’s nearby to utilize. If there’s already a fully operating running business there, it makes more sense for us to use them and have them run that business and pay us for the option than to try to implement that completely ourselves too.

It sounds like in this space, cash-on-cash is higher because it’s more transient and dynamic pricing. People are paying for experiences and multiple different asset streams, but one of the reasons why most investors like real estate are this idea of taxes as well as being able to depreciate and things like that. What does the tax structure look like on an investment in an RV park?

Are you referring more to the depreciation specifically?

When I invest in multifamily, I’ll get a big loss on my K-1 statement that I can then file against my other passive income streams. Neither of us is a tax professional. I don’t know even what I said then. I’m a guy on the internet, as you are as well, so you’re not giving tax advice. What does the typical tax structure look like on these?

You would be surprised, honestly. It’s a lot more than what you would expect. When I first got involved, that was one of my first questions as well. I was like, “What does cost seg look like?” I’m assuming in my mind, “It’s mostly land. What’s there to depreciate?” I’ve talked to several cost segregation experts. This is not word for word what they told me or anything. I’m not a tax advisor. There’s quite a bit of depreciation to take on an account.

On all these properties, you’ve got your infrastructure there, like all the roads that go in and all the utility connections. A big part right there is those types of improvements. In some cases, depending on the property, there may or may not be buildings or a lot of buildings, but all those other infrastructure items count for quite a bit depending on the type of property or the type of improvement it brings on different types of the amortized 5-year or 15-year depreciation. Dealing with that is going to vary by property. Typically, for the ones I’ve seen, it potentially could be more than what you are getting from multifamily.

That’s awesome. I saw that as a potential downside because you can’t depreciate land. You can only depreciate physical infrastructure. I never even thought about the roads, infrastructure for the plumbing, and things like that. When you’re looking at this space, tell us a little bit about the properties you’re going after. Are there specific geographics? Do they have to meet a certain pad limit and all those sorts of things that go into finding a property? What’s your buy box?

To keep it as simple as possible, our two basic criteria are size and location. We want ones that are at least around or above 100 existing rentable spaces. That does not necessarily mean full RV pads, but it could be a mixture of RV pads, cabins, and tent camping spaces. It’s at least 100 or so existing camping spaces. Preferably, if there’s room to expand, that’s even better. If there are additional acreages next door, we can inquire as part of it to expand that out. That’s always ideal. Usually, the number one thing we look for aside from that is the location.

As you attested to, people are driving, in some cases, long distances, but in some cases, with gas prices being high, people may not be taking a cross-country trip. You may not drive from Oregon to Tennessee to go camping. Our properties are within a 2-hour or a maximum of 3-hour drive of a major metropolitan area, preferably within 2 or 3 big cities nearby. The reason for that goes back to those gas prices.

First of all, if you have an RV camper, you want to use it. You don’t want it sitting in your driveway and then paying to store it somewhere. You want to have fun with it. You’re going to go out and use it. On a more regular basis, we’re going to get a lot of the local people to come to our properties and make 2 or 3-hour drive to have fun. Our second criteria is the location. We want that geographic nearness. Most of our users are going to be those close-by residents that are coming out to have fun.

ICWI Don Spafford | RV Parks

RV Parks: Most of our users are going to be those close-by residents that are coming out to have fun.

One of the things we were talking about before the show as well is this idea. When you’re in syndications, you’re raising on a deal-by-deal basis. We’re starting to see a shift toward funds. I would assume after 2020 and 2021, this space is exploding with opportunity. How are you all structuring your offerings for investors as well?

Previously, all of our deals have always been 506(b), which means you have to not be accredited, which also means we cannot advertise those openly, but the reason we had that is this. Our goal is to help people to become accredited investors to be able to get into these types of deals, get greater cashflow, and improve their overall personal finance.

This space has grown so much. Our group, in particular, Happy Camper Capital, has become a very household name as far as when you think of RV resort investing. With that, we have such a tremendous amount of deal flow that it’s hard for us to raise individual deals one by one. In some cases, we’re doing 2 or 3 at the same time, which makes it even more complicated when you have to focus on only 506(b).

We have launched a 506(c) fund to bring on, in that case, accredited investors to help fund multiple deals for us. We have launched a $25 million fund. The idea for that is to hold between 5 to 8 properties within that fund. We’re not grabbing anything that comes up. Our criteria is still high as far as our expectations for cashflow and overall returns. We’re not accepting anything that comes in. We still have our personal criteria that we strictly go through with all our due diligence for everything to make sure that these meet our standards to put into this fund.

Strictly go through with all your due diligence to ensure that you meet your standards to put into the fund. Click To Tweet

Everybody that gets into this fund is going to participate in all these different geographically dispersed properties to help overcome some of the seasonality of the income we’re talking about. Some are in the North, South, East, and West. Therefore, the income becomes more stable and consistent throughout the year. Rather than having the bulk of your income coming between two quarters of the year, you’re getting it now split out throughout the whole year more evenly.

We launched that fund for that purpose to not have to compete with ourselves to try to raise for 2 or 3 deals at the same time. Hopefully, we will have this fund ready to go. We can continue to bring on more properties. It is a blind fund, but as opposed to most other blind funds, you will know what’s going into it because every time we get a new property, it’s going to go into that fund.

We’re going to do a webinar to show you exactly why this property meets our criteria and why it’s going to the fund. You can see there for yourself the returns and expectations that you can see from that fund. We have plans to launch additional funds down the road, but this is our first one. We’re getting it started. We will see where it goes after this.

The main question is this. If I’m an investor in your fund, do I get to stay on the campgrounds for free for at least one night a year?

More than one night a year. For our investors, we provide up to one-week free stay per year at all of our properties and discounts after that throughout the whole year.

Leave with the good news first. That’s awesome. You sold me.

We want our investors to use our properties. We want you to go there, have those experiences, have fun with your friends and family, and then tell your friends about it, so they will come back as well and invest with us.

That’s awesome. This was a fantastic conversation. Thank you for allowing us to dig into this space a little bit more because I’m super bullish on it. I want to transition us now into the last round. We’re calling this the Five Toppings. Our first one is this. What is your favorite book? What’s a book you’ve read that’s given you a paradigm shift?

I’ve read quite a few books. Prior to getting into real estate, I had never read many books. I don’t like reading, but after I got into real estate, I discovered I love reading about real estate, finance, and taxes. I’ve read quite a few tax books. I’m reading a great tax book now. As far as paradigm shifts, my number one choice that I’ve read honestly is The Richest Man in Babylon. It’s a short read and not necessarily real estate-specific. At the time I read it and how I interpreted it, I saw all kinds of great information, tips, and advice in general for personal finance. I love that book a lot.

It’s an old but goody. Our second one is this. I believe that the person you become ten years from now is directly correlated to the habits that you have and the things you do every day. What are some of the things that you do every day?

I still listen to podcasts. I still get my education from a lot of podcasts, such as this one. I’m still trying to continue to learn. I don’t know everything. I like to listen to podcasts to hear about different things, tactics, and experiences people have done so I can learn from them. That’s something I do every day. I still like to look for and analyze properties as they come up to stay up to speed on where the market trends are at and what these properties are worth now as opposed to a year from now. I like to stay on top of those types of things.

You’re keeping that muscle strong. I like it. Our third one is this. What’s the best piece of advice you’ve ever received?

It’s one that I share quite a bit with people. I don’t know who I heard it from or where I heard it originally. It’s old. I’m sure you’ve heard of it as well. Anytime we go to a wedding, and somebody asks me to put a suggestion or advice for the newlyweds, I always say, “Live below your means and invest the rest.” I try to live by that.

It sounds like a The Richest Man in Babylon quote too. Our fourth one is this. What’s the thing that you’re most proud of in your life?

It may sound cliché, but I have to go with my family. I always try to put family and my faith above everything else. Anything else that comes to interfere with those things, I have to cut it out or avoid it. I don’t schedule meetings on weekends or at night after a certain hour because that’s my family time. I don’t do business on Sundays. I try to live by those things.

I love it. Our last one is this. If you could sit down and eat a bowl of ice cream with anyone, dead or alive, who would it be and why?

I want to say Warren Buffett. I almost had the opportunity to sit down with him for lunch one time, but I didn’t.

Is that a requirement for living in Nebraska? One of the benefits is you get to sit down with Buffett anytime you want.

It was more the benefit of going to the school that’s right next to his house and being in the Investment Science field. I’ll go with something I never even thought about. It just popped into my head. I’ll go with George Washington, the founding president of our country, and hear all the experiences he went through to do all things they had to do to make our country what it is now.

That’s a more common answer than you would think. A lot of people say that. We’re going to go back and do a tally of who said what and how many times. I’m pretty sure Elon is number one, but Uncle George is up there. Don, this was a fantastic conversation. I appreciate you coming to the show and talking about RV parks and a different asset class we haven’t explored before. If our readers wanted to reach out to you and learn more about you and what you’ve got going on there at Happy Capper Capital, where is the best place that we can point them?

I’m very active on LinkedIn. You can find me on LinkedIn. You can go to our website, HappyCamperCapital.com. You can find me there on the About Us tab. You can find my name and schedule a call with me directly from that. We would invite you to register on our website while you’re there to learn more about our investment opportunities as they come up and to learn more about the fund as well.

Thanks for coming to the show.

It’s my pleasure. Thanks.

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About Don Spafford

ICWI Don Spafford | RV ParksDon Spafford has an educational and professional background in Finance and Securities Investing. He has held several management and leadership positions in his corporate finance career before jumping into real estate . In 2021, he joined Happy Camper Capital where his team focuses on syndicating RV Resorts.

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Matt Fore

I’m a son, friend, triathlete and investor. I founded ICWI to help others identify and remove the hurdles keeping them from personal and financial success. Through educational content and thought-provoking conversation, my goal is to help you create income streams so that you can live a more intentional life.

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