165. Buying An Abandoned Campground! - Interview with Heather Mueur

26:55Natalie Palmer:And then you're also doing group bookings, too. So do you do like group discounts if somebody wants to book up 30 RV sites or something like that? Yep, absolutely. We just had actually our first like glamping retreat. That was a women's retreat. I think there were 16, 18 women total. So they rented out like four or five of our tents and cabins and had yoga around the pool in the mornings. And we did get an event tent, set that up so they could have dinners there. They brought in catering and all these fun things. And that was kind of our first test run to see how that would work in the future and kind of where the kinks are.

27:35And that was a lot of fun. And so we'll probably be doing more of that in the future, too.

27:40Natalie Palmer:With group bookings and things like that, are they able to instant book? I'm just comparing this to my worldview of Airbnb. What does that look like on the booking platforms? Or are they emailing you guys and having to work with staff to create a custom booking like that? Yeah, when it's something like that, they are emailing or calling in and we're working with them and creating kind of a custom quote, depending on what their needs are. Because it's more like we're charging an event fee for something like that, where we're setting up a tent. It's not just okay, well, they're, you know, they're renting out a few tents together.

28:15uh for rv sites we have actually a buddy site where people can rent out two sites together and we do have it like a discount if people rent out more than a few rv sites but that's something again they need to call in it's not something that's necessarily automated unfortunately

28:31Natalie Palmer:okay okay okay perfect so this leads me back to my question was on like staffing and operations so like who's picking up the phones here and like responding to these emails um yeah how often are you at the property? How much staff do you guys have? And does that fluctuate with your seasonality? Yeah, it definitely fluctuates, but we have a management team there. So we have managers that live on site. They manage the property, they manage the staff. We've got inventory, camp store inventory. We sell firewood. We rent golf carts. And we have a laundry facility. I guess I didn't even mention that.

29:08So there's all these other streams of income as well. We want to kind of consider that when we're talking about our RV parks. It's not just the nightly rental. There's all these other income streams that you can add.

29:18Natalie Palmer:Wait, the laundry facility, you make money off of that? Yeah, we have a coin-operated laundry room, you know, laundry or coin and credit card-operated laundry. So because a lot of people that are coming to us specifically, they are long-term campers. They're traveling around the state place a week or two. It's not like they're just going back home and doing their laundry and they're packing for a weekend. Sometimes they're on the road for months at a time and traveling around the country. So yeah, that's another way that we're able to accommodate our guests and give them another convenience. Did you know when you bought this piece of land that you'd be also operating a laundromat and a coffee shop and a pizza kitchen?

29:59Natalie Palmer:Did you predict that all of this was going to come from from doing this project um all of it except for the coffee shop so the coffee shop was like you know why we might as well add a coffee shop and we actually built it out as a separate like having a separate entrance from our camp store because we thought i was like i don't want to run a coffee shop right that would be a lot that alone is like a full-time job and then you've got everything else going on so i thought we're just going to build this we're going to it'll be attached to the building that'll have its own entrance so that we can lease this out to a local, you know, a local coffee distributor shop.

30:35And so that was the idea. And then after reaching out to some of them, we realized they were like, well, you know, we already just opened up this place or we don't want the capital to do that. But then we talked to somebody that was like, hey, we'll roast, we'll pull sell you the beans and we'll train your staff. And I also have a cousin who lives in Detroit and has, I don't know how many coffee shops there and does an incredible job. And so he was kind of my mentor and he was able to basically was like, these are the things that you need by these exact things. This is the layout you need for your walk up.

31:10And, you know, he really held my hand, thankfully, because again, I was like, I don't want to run a coffee shop, but here I am running a coffee shop. But as far as team goes, I have a manager for that now. So I don't do any of the ordering or the managing or the staffing of any of that. Now I have somebody that manages that part of it. So our coffee shop is kind of its own business because it has different office hours and operations needs. And so we've got our managers that manage the campground. And then we have the manager that manages our coffee shop. And we've got housekeeping, obviously, because we have really nice linens and things that need to be turned.

31:49These are essentially a hotel with canvas walls in our tents. So and then we have on-site maintenance because we've got to have somebody there to Empty out the hot tuts after every turn and do all the landscaping and clean out the fire pits after every turn all those things as well So we've got a team of it does fluctuate But between front desk and coffee shop and everything else i'd say between 12 and 15 team members there And as far as me, I don't i'm there when I need to be but that's maybe once a week or so. That's it? Yeah. Well, and again, right now we're working on a different project. So my focus is really on our new project, but that was the goal is to build a team.

32:35And that was the communication we made with our managers is, this is not like, we're not managing this and you're helping us. Like this is your, we are really giving you full reign to manage this property. And we need you to be able to do that. So that was how, I mean, that's the systems we build. We want our people to run the place and really have confidence that they can do it well. And they have. So, you know, there's always things that come up and we help troubleshoot those. We had a flood in the basement the other day because we had crazy rain. So, of course, we're over there checking it out and seeing where the water is coming from and all kinds of random things that come up.

33:14But I'm not there working on things. I'm there to say, OK, how can we make things better? How can we improve things? um what else do we need what are we missing like in the camp store inventory wise those types of things that you know i just want to keep improving but as a day-to-day running goes uh no we're we

33:33Natalie Palmer:have a team for that um you mentioned that you have a few a couple people that live on site full time are they living in those cabins that you guys built no they're living in their rv yeah in their own rvs yeah okay got it and it's just one it's a couple and so they live in their rv they live on site and that's their home they've lived in that they've traveled a lot and done that so that's their home they live actually just through i think it was um indeed we put it because we weren't specifically looking for someone who wanted to live on site like we could have we were looking for maybe somebody in branson that has a lot of management you know hospitality management experience and could come on as a manager but we put the job ad out on indeed or something like that.

34:18And they responded with, you know, if we would love to do this, could we have a site and live on site with our RV? And so it worked out really well.

34:29Natalie Palmer:Wow, that's amazing. Are you willing to share all the staffing and operations? I think a lot of people would be under the false assumption that, oh, it's just RV hookups. Like, you know, you're not even turning these properties over. Like there's no cleaning costs in between. It can't be that expensive. and I assume that that is very, very, very wrong and your operation costs are crazy high. I'm willing to share the numbers. You said you're bringing in around$200 ,000 a month, so two to two and a half million a year. How much of that is just covering staff and operations? So yeah, it's quite a bit.

35:09You're looking at at least 50 % expenses. I mean, and staffing is, it's always a struggle of, okay, do we have too many? Do we not have enough? And because we're, you know, Branson is seasonal, there's busy seasons, there's shoulder seasons, then January and February is dead, you know, for the most part. It really is a struggle to, it's always changing. And again, this is still being our first year. We're just learning along with it and figuring out that, you know, RV camping and hospitality is different than, you know, our short-term rentals here in town and busyness is different because it seems like actually RVers you have a lot more couples that are they're not traveling with kids so you don't have like okay well these families are coming in and then then it's slow because they're back to school we actually still our shoulder seasons a lot busier than we were expecting it to be so it's it I don't have the numbers with me but it's it's a little bit painful sometimes looking at those payroll numbers because because um and you know right now and you'll probably hear this from any business like finding good staffing is really hard i mean you know that are reliable that show up that are you know ready to do the work it's it can be a challenge so um we have a great team thankfully and um but yeah i don't i don't have the numbers but it is something that there is a lot of expense that goes into it because yeah the utilities alone that right there is a big expense we have a heated pool and so it costs a lot to heat the pool and it stays open if not your we don't know if it's going to stay open year round or if we're going to close it down in like you know november december it kind of depends on the weather but there's a lot of those expenses you know laundry facilities because we have our own laundry facilities and then we have the guest laundry but constantly running basically 17 short-term rentals with, you know, that fluctuation of all the bedding and the linens.

37:13That's a lot. And then constant, constant laundry. And then the camp store, you know, it's a big piece of property or a big building that needs to be cleaned and all the bathrooms, the public bathrooms. So we have our bathhouse that has public bathrooms in them for our guests. Those all need to be cleaned multiple times a day. So it's not our housekeepers aren't just turning the tents. They're taking care of all the laundry. They're taking care of our bathrooms and the camp store, doing the laundry for the camp store because we've got a pizza kitchen. So we have towels and same thing with the coffee shop.

37:48You know, there's linens that come from there. So it is really a lot. And same thing with maintenance, landscaping, especially with our maintenance team, you know, there's leaf blowing. Oh, working anchors. Exactly. Yeah. So there's always grass that needs to be mowed, weeds that need to be killed. Let's make sure that there's no poison ivy growing up these trees. You know, all those things. That's just a constant watching and seeing what needs to be done. And every day is different.

38:15Natalie Palmer:Well, even with all that, it's obviously profitable enough or doing well enough that you guys decided to go on to your second project. So tell us about the boutique motel you're venturing into now. and you guys are rebranding this one as The Drift, but it's currently operational already, right? You inherited some bookings with it when you bought this property. Yeah. Yeah. So this is actually just a few minutes down the road from The Embers and it is on Lake Canicomo, which is a fishing lake. It actually looks more and acts more like a river. It's a cold water fishing lake, trophy trout lake. And it's this really cute property.

38:54It's on a little over two acres and it's 20 units currently but we're adding another we're going to add a tiny home also to it so it'll be 21 when we finish but it was completely operational the sellers lived in on in one of the houses there and there's 14 like standard motel style units and then there's a condo building with four condo units through two and three bedrooms and a four-bedroom house and a lot of these overlook because we're on the lake we have three so this isn't just like a motel like okay okay like it's a resort i mean it's a resort okay it's an old but it's we're really leaning into a like a modern day trout resort uh boutique hotel feel so they're they're really quaint right now they're really they haven't been updated in a long long time and so So there's a lot of band-aids that have been put on, on the property for a long time.

39:55And it's so exciting to see what it's going to be because it has so much potential. And again, the location is incredible because it actually, it, it, we have three docks as well. So we have 19 boat slips, three fishing docks, and people come from all over to come fish, that they actually hold a, like a fishing, oh gosh, what is it called now? Like a competition? Yeah, like a competition every year. And so we're going to keep that up. Got to learn how to do that. I actually was able to shadow the previous owners on that this last March. But there's, yeah, so there's all these people that have been coming for 30 years, 40 years.

40:39It's been around since the 60s. and so right now the bookings that we're getting are repeat bookings from families and and folks that have been coming for years and years we're not advertising yet and they didn't do any advertising had a website but they didn't do any marketing or any advertising anywhere so there's just again so much potential though for for doing that so right now we're doing it in phases where we're built like units one through six which is a building is all gutted right now and we'll be renovating those. And then currently though, everything else is open and available to rent in that old style.

41:17So we haven't made changes to all of that. The seller's house, it was a three, four bedroom and that's completely gutted. We're gonna be renovating that and turning that into another vacation rental. That'll be four bedrooms overlooking the lake. It's got these big windows, nice big deck and entertainment room. It's gonna have a hot tub. so all these fun things planned for that that just it had so much potential we're really excited to

41:44Natalie Palmer:see the finished product so with something like this i feel like it would be so exciting to hear like oh yeah you guys have you know 70 of the guests come back every year or what was the percentage you told me how many are repeats i mean like 99 percent yeah okay since we've owned it which I think we closed, was it May something? May 15th. Since we've owned it, we've had, I mean, a handful, maybe 10 new guests that have never been there before, but they were told by previous guests. Like it is all people that have been there over and over and over again through the years. So this is almost scary to me, not to put like doubts into you, but I feel like, you know, on the one hand, you're like, oh, great.

42:27Natalie Palmer:Even if we don't do any marketing at all, Like we've already got a whole Rolodex of people that are going to be coming in and know who we are. Like that's a great spot to be in. But it also, I think, would make it scary to like raise prices. You guys are obviously buying this and you're trying to make improvements with the idea that you'll bring in more revenue. How are you going to roll that out? Are you guys worried about like alienating these loyal customers? Like what's the plan there? Well, and it was really interesting because that was my fear, my thought too. But obviously going into this, we're underwriting this knowing that we're going to have a completely different product when we finish quality wise and price wise.

43:07Right. Because we want to build something that is unique and needed in our area. We don't there are no other like lake resorts that are on the lake this close to Branson that are not just like updated, but updated nicely. I mean, that have like a theme that really feels unique. week and so that's what we're going for and that's a big stretch from what it is currently and so we know that there's going to be guests that the reason they're booking now is because they want the cheapest thing possible and right now the cheapest thing around and so obviously we're not going to keep all those guests there's going to be other places that they're happy to go because they just want a cheap room and they want to fish we want to provide a place for those people that want to fish, but also like their wives want to come with them and they want to stay in a place that they're not scared to walk around without shoes on them.

44:04You know what I mean? So that's one of the things. But as we've been open and seeing these people that have been coming for years and we're talking to them and kind of laying out a vision of what we're going to be doing, I would say like 90 % of them are really, really excited about it. and they're like, oh my gosh, like it's needed it. You know, this, it needs it. We know it's needed it. And we're really excited for it. Like we can't wait. And you know, there's those 10 % that are like, oh, are you going to raise the prices? And we're like, oh yeah, yes. They're going to be, it's going to be different pricing because it's going to be a completely different stay, but we're going to give you a completely different experience than now, you know?

44:45And so obviously, you know, you don't build something. It's, we're not trying to attract everyone. right? If you attract everybody, you're attracting no one, that whole thing. And that's really what we try to keep in mind when we're doing something. But it is honestly surprising and really promising to have these talks with the guests that are there. And honestly, most of them, it's not that they're just trying to find the cheapest place. It's because the location. They love the location. And so they're like, we understand it's going to be different. We know it's going to cost more, but it's going to be nicer.

45:17I just love this place because I can put my boat in.

45:20Natalie Palmer:They were like willing to settle for everything else because of the location. Now they'll actually get a product that like matches how amazing the location is. And we're going to be able to bring in so many guests that would not have considered staying here before because of what it was. And because they wanted a nicer stay, a different quality of stay that we'll be able to provide for them. And because it wasn't even being marketed, I just don't have any real concerns about that. Because we've seen what other places in the area that aren't even on the lake that have taken a motel and really made it well done have been able to do.

45:59And they're really successful because there's not a lot of those in our area yet.

46:03Natalie Palmer:So my next question, this might be a better question if Ryan was here, but hopefully you can still answer. um how is he underwriting the both of these projects the embers and the drift when you said that like you kind of this is the first time you guys have brought either of these concepts to branson so where is he pulling comps from how is he projecting revenue um yeah i'm just curious about that so for the embers specifically we did there was a feasibility study and it was required by the SBA, but it was actually a really, really great way to find out what it, and it's really a market study.

46:41Natalie Palmer:So we did our - What was it called again? A feasibility study? Called a feasibility study. And that's something that they do in any business. So whether it's a coffee shop or a auto parts store, they, you know, if you're getting a loan, that lender might say, well, we want to know how much this is going to make. And, you know, we're not just going to pull numbers out of thin air, we're going to find out, okay, what are your comps doing? So this feasibility study was like a$10 ,000 study, but it was a 178-page report that said, these are your comps. These are the other campgrounds in the area. This is how much their nightly rates are.

47:19This is their occupancy. This is how much, you know, that you, based on what you are providing, this is how much you're going to make. This is how much it's going to cost to build. This is, you know, glamping. They pulled, they had statistics for glamping from all over the country and they said, okay, well, these are your comps. This is how much, you know, this is what your market is like, and this is what you're looking to make. And what was really exciting is when we got that report back, our numbers were really, really close in line with theirs, which gave the lender more confidence in us. And that was, they were like, wow, you guys did a really great job.

47:55And then, you know, that's something we could bring to our partners and say, hey, you know what? The feasibility study matched up with our underwriting. So, you know. But that one.

48:03Natalie Palmer:Ryan pulls such accurate numbers then without having that whole study done. Like where was he getting his projections from? We're looking at other comps, you know, saying, OK, what are their rates per night and how busy are they? And, you know, we're just kind of making some estimations and also looking at short term rentals in general in the area, knowing that market because we were already in that market. And with this new, with the drift, it's almost easier because again, a lot of those are really more like short-term rentals than they are motels. We've got, you know, condos and houses. So we know what those do.

48:35And we actually have a lake house here in Branson. That was our first vacation rental. So we know what the lake houses can do. We can, we know what four bedrooms can do if they're done well and designed well. So we already kind of knew those numbers. We knew the expenses we knew. And because the embers we know you know payroll expenses better even than we did before so that's that's really what we did and there's always things that go wrong and we're very very conservative with our numbers um when it comes to like we're not let's hope for the best and shoot for you know the high end because we're bringing partners on we're always really conservative with you know putting a lot of extra cushion in our numbers usually it's the the timeline with this new project is the thing that's kind of, you know, a pain because you're, it's not like, okay, we bought a vacation rental and we're going to update it and put it back on market.

49:27We're working with permitting from the city and different things when it comes to renovating a building. You know, you've got to go through all different types of departments within the city and the county. So that's taking longer than we had expected. But as soon as that comes through, we're going to be hit the ground running. So.

49:48Natalie Palmer:And you said that one, the drift, you guys are renovating this one in phases, right? Because you still have active bookings this whole time. Right. So we're basically renovating it by building. So there's essentially, there's 20 units and there's one, two, three, four, five buildings total. Some of those are individual houses. Some of those are like four or whatever. Yeah. So we're going to, we're going to do a building at a time or in one of them, we're doing two buildings at a time because they're right next to each other. So we're doing a building at a time so that we're not encroaching on other guests.

50:22We're not inconveniencing them with, you know, being in their way or, you know, hammering on the wall next door or anything like that. So when we do the condo building, we're going to do all four units. Nobody's going to be staying there. So yeah.

50:34Natalie Palmer:What about your marketing for that one? Are you doing that in phases too? Like, are you already photographing each building as it's done and updating the website or are you guys going to wait till everything's done and then do like a whole photo shoot and rebrand of the whole property um a little bit of both so right now we don't have much of a website we're just getting working on our website we had to get our our um new which the biggest challenge has been getting a management software up and running on a place that's already existing and running and has future reservations but there oh you have to like My reservation system was a paper calendar and pieces of paper.

51:17Yep. Of course it was. It was. It still like gives me anxiety. That was the hardest part is, you know, taking that information, putting that into a new software and making sure that, you know, then we're going to be changing it. Because right now, this is how much we're charging for those rooms. We're keeping the price the same. We're not increasing prices on any of the existing old units. But, of course, once we update them, then we'll be changing them. So there's, that's a whole new, there's a lot of nuances there and a big challenge, but that's something that we finally are getting the kinks worked out like this week, next week, and then we'll have the website up and running so that guests can make reservations on the old units.

51:59And then once we have the new units up and running, they'll be able to make reservations online as well, which they hadn't been able to ever. And that's another thing people are really excited about. They're like, I can make a reservation online. Oh my gosh.

52:10Natalie Palmer:They were still calling in to make the reservation. Yep. Yeah. Wow. How are you guys financing this one? Are you doing the SBA loan again? Or did you get all capital partners on this one? We're doing capital partner. We're bringing capital partners. And then we are working with a commercial loan with a local lender because, again, it's existing. So we were able to show them this is how much it's making now. So we're good. We're in the green. We'll be able to make those payments. And then this is what we're going to be doing when it's done. You know, this is our plan. This is our construction budget, all those things.

52:44So, yeah. Yep.

52:46Natalie Palmer:And what are numbers looking like on this one between the purchase and renovation? And then how much are you projecting to make? I don't, I can't remember the projecting to make. I never honestly, like, I know I get told that at one point and I'm like, great, sounds good. But then I'm off and I'm like, what is it going to look like? Oh my God. I'm like so opposite. it that's like the number that i'm like we better hit this like i fixate on how much it'll bring in yeah so it was a little under two million for the purchase price and we're wow that's for 20 like full units not just motel rooms but like houses yeah that's 20 units including like lakeside with 19 with three docks and 19 boat slips oh my god that price is incredible actually it was 1.9 i believe but uh yeah we're we're rounding and then that price is incredible wow congrats what a find and then well but then again you know their numbers weren't because again they were they were this is a commercial yeah yeah priced commercially so we're looking at the numbers based on a cap rate based on what the income is was and so i just think even the real estate alone like without looking at the the business side of it is so worth that no i i agree and so yeah we're going to be putting about two million into it okay and again this was a a commercial loan with a local lender and then we brought in capital partners for that down payment and some of the construction costs as well so um the great thing is our capital partners you know they get to come in and they we give them the full presentation of what it is what it can do again we're really conservative with our underwriting so we're showing them all the things and they get to kind of just sit back and relax and invest in something that's going to just improve over time.

54:55Natalie Palmer:That's amazing. And then I know you said you don't know the projections you hear at one time and then you forgot, but I'm sure Ryan would not have moved forward if it wasn't going to be profitable. Correct. I think, and the ROI on it for our investors is like an 18%. Oh my gosh, amazing. And then we did have our appraisal came in. So the purchase price was 1.9. I think the appraisal was, I think it was close to 3 million. So it was, again, overnight. Like it's really fun on these things to be able to make equity like immediately. Yeah, yeah. That's incredible. Wow. Well, congrats, Heather. This is so exciting.

55:38Natalie Palmer:And then that one you said the website and everything will be up for this one next week. I would say within this next month. We're working on a few kinks and hopefully I can, you know, when there's different companies working with us, hopefully we can get it by next week. But if not, I would say within about three or four weeks max. um in the meantime though people can at least go check out and book the embers for now that's open and alive and well and thriving you're about to have your one year mark there and our first um i think it's going to be about i would say about two and a half months our first building will be completed and so our new on in on the drift our new units will be available for rent then.

56:31Natalie Palmer:Oh my gosh, this is so exciting. Okay, Heather, I think we can wrap up there. I don't have any more questions for you unless there's anything else you want to share or you think we left out? No, I think maybe just contrasting short-term rentals versus these larger projects because I think a lot of people, and I know I was initially too, really intimidated by something like this, right? Where you have a huge RV park and it's like, oh, there's all these different things but even with uh the motel you it's really you take a short-term rental and you just you make a decision once you know with the short-term rental if i'm going to decorate it i work the reason why we're leaning into these larger projects is because it's it's fun to do it on a bigger scale but it's there's more decisions to make yes but it really is like okay i get to make this design decision and then times it by 20 you know obviously there's different ones we're going to be designing these differently but we're we're going to be i'd rather put the effort in once like yes it's it's a lot of effort up front but i'd rather do that once than individually um for each you know separate unit and different parts of town so that's just it's not as scary as I think a lot of people think it is.

57:50It's just a little slightly different approach. The lending is slightly different. But it is a lot of fun. And, you know, we're really enjoying it.

58:00Natalie Palmer:Are you including updates for the Drift on the same Embers Instagram account? Or did you make a new one for this? So on no, the Drift has its own Instagram account. My gosh, what is it? And the embers is the embers branson the drift is the drift resort okay on instagram and then i'm posting all the things on mine as well so but the things that are happening at the drift are also getting posted on the drift resort okay we'll link all of that in the show notes so if people want to keep up with everything you're doing they they can follow along there but heather thank you so much thanks for being so open about the numbers i know you don't know all of them and maybe we'll do a future episode with Ryan, but I appreciate the transparency.

58:49Natalie Palmer:That's what people always have questions about. But yeah, obviously it's going well because you guys would not be embarking on the next project this soon if the embers was up in flames, excuse me. So congrats on everything. I can't wait to see the drift come along and yeah, congrats on almost one year of the embers. I appreciate it. Thanks so much, Natalie. This was fun. And with that, it is now checkout time. Thanks for listening and I'll see you back here next week. Lastly, as Airbnb hosts, we all can appreciate a good five-star review. So you already know a great review on this podcast would mean so much to me.

59:27Natalie Palmer:Please subscribe, review, share, and connect with me in the show notes below. Bye!

59:39Thank you.