Taking the Big Step: Buying and Selling Camp

Rick Stryker, PE
July 2019

Over the past 20 years, we’ve been asked often to help buyers and sellers of camps in transition. With very few exceptions in the industry, most will only buy and sell one time in their career, so there’s very little opportunity to put lessons learned to good use. And while camp folks are usually glad to talk about their programs and operations (that are running well), people seem a little reluctant to share their hard-earned “camp buying lessons.” Those lessons are kept highly secret, and each buyer (and seller) is left to repeat everyone else’s stumbles. To fill in some of that knowledge gap, following are some overlooked or under-considered things that often come into play.

A Philosophical Context

Camp to most people is an ethereal collection of memories and lifelong friendships. The property where those memories are made is certainly important, but the relationships and experiences will transcend the real estate setting. In fact, if kids are remembering the buildings and property, it’s probably not for good reasons. Appreciation of the architecturally spectacular dining hall with soaring rafters will be lost on nearly all camp attendees. Leaky cabin roofs, rot, decay, and rickety construction (even with layers of fresh paint) will make their own memories, though. If that’s what they’re talking about when the session is over, you can bet that mom and dad are going to be tough customers next year. Simple, done very well, and maintained meticulously, even if it is rustic, far exceeds something that may look fancy but proves to be uncared for upon closer inspection. This is critical for both the buyer and the seller to keep in mind, as “deferred maintenance” usually can’t be brought up to standard in a couple weeks before camp opens no matter how much paint goes on. Real quality catch-up will take both time and money.

Have a Business Plan — Write It Down

This comes up with every project. For a want-to-be camp owner, developing a business plan for the “camp dream” is a tall mountain to climb. There are so many things to consider, ranging from program to staffing, marketing to food service and cash flow. Unfortunately, a lot of folks begin their search for property before they’ve committed a plan to paper. A buyer’s intent may be crystal clear to them but reside only in their head. To reconcile a property to the buyer’s plans, it is critical that everyone share the buyer’s vision of what this “thing” will become, even if it’s the continuation of what’s already there. That allows everyone involved to make insightful and productive observations and recommendations along the way. In the context of the future camp, the transition team can communicate opportunities and possible concerns as they arise. With all of the things that happen during the due diligence and prepurchase period, there’s much to be forgotten that could prove important later, after the ink is dry. The well-prepared business plan provides everyone involved with the insight that otherwise is locked away in the buyer’s head. The time, thought, effort, and care that is invested in that document will pay huge dividends as the camp of the future comes to life, because it is the only yardstick tool to gauge the amount and rate of success of this endeavor.

Know the Environment

The environmental statutes that have done so much to restore the streams, groundwater, air, and soil are mostly invisible to everyone who is not in that business. This piece of the puzzle is just part of the correction of unwitting use of materials that provided more harm than good in the end. When it comes to a purchase offer, a lender doesn’t want to be surprised with a giant liability, and neither do you.

A Phase I Environmental Site Assessment is a standardized procedure that provides the buyer (and the lender) a level of confidence regarding some prevalent conditions. One very easy example is asbestos. Until the early 1980s, asbestos was a toughening mixture put into a wide range of building products including insulation, siding, ceiling tiles, flooring, and even chalkboards. We’ve come to understand that the mineral can be a health hazard, but most people don’t know how to spot it, whether it is a hazard where and as it is, or what it might cost to get rid of it. Even so, the federal hazardous materials laws now make the holder of such materials (in this case, the buyer) responsible for the costs to remove and dispose of that hazard. Other potential hazards that may be brought to the forefront include lead paint, leaky power transformers, polychlorinated biphenyls (PCBs), and unsanitary housekeeping practices like burying construction debris or shop floor drains.

Buyers: Ask your lender explicitly whether they will expect a Phase I as part of the closing documents. If so, any offer you make needs to be contingent upon a clean report. Ask your lender for recommendations about who has reported for other buyers in the past in that area and who they do or don’t recommend. Because you will be commissioning the work, this will be an out-of-pocket cost on property that you may not buy. Be financially prepared (often four or five thousand dollars) and allow sufficient time (as much as a month or six weeks) to get that done.

Sellers: If you’re even considering selling your property five or ten years from now, commissioning a Phase I will help to identify showstoppers and allow you the time to rectify them incrementally as time and budget allow. Moreover, going through the process and having a report of your own may help you identify ways to keep a clean house going forward. Once those concerns have been quantified (in a Phase II process) and then abated, you can provide every buyer a clean bill of health and accept the contingency of a buyer Phase I with confidence. Their lender may not accept it (too old, concern for bias, whatever), but you can authorize it confidently.

Look Short of the Views

Camp buyers are understandably excited about walking a property and envisioning their camp in this new place, so it is easy to ignore what might otherwise be warnings about whether all is as it seems. Look past the paint of every building to see if there is decay, rot, or signs of insect damage. If you’re on site during a rainstorm, look at how the water drains and see whether it goes past, around, under, or into buildings. If you miss the storm, look for where puddles form. If the puddles are dry, look for washes and drainages that can tell you the same things. Look at roof ridge lines for sags or buckles that indicate something’s been overloaded or that there’s a structural problem in the walls or roofs. Do the buildings have gutters and downspouts, and where does the water from those go? If there aren’t any gutters, what does the underside of the rafters or the facia at the rafter tails look like? Is that drip edge flat and level? What about the shingles themselves? Are they flat and level and all there, or are some missing (especially at the ridge) or curled (a sign of age and roof heat)? Do the ends of the building or the ridges have vents to let summer heat escape? If there are ridge vents, is the overhead inside closed off or is it open to the sub roofing above? If it’s open, that building isn’t well suited for any sort of climate control without a bunch of modifications to the building.

Drink the water from the tap. Does it have a strong smell of any sort, including iron, sulfur, or chlorine? Are the bathroom and kitchen fixtures stained orange, or do they have a white, crusty deposit? If you’re looking at the property and the water isn’t on, that’s common. Look at the cleaning supplies near the dish sanitizer. Descaling chemicals like Lime-Away or Iron Out may be signs that the water chemistry is out of whack. If the seller’s people are drinking bottled water, that should be a sign that something is amiss with the water supply.

Look for rodent traps and poison around baseboards. Read fire extinguisher inspection tags. If there aren’t any (extinguishers or tags), ask the seller about that.

Permits

Regulations are everywhere, but the specific rules vary by region and jurisdiction. Knowing what agencies or entities are involved can be an exceptionally complicated task. Many — including water supply, fire, and food service — are renewed each year, so for a buyer purchasing an existing camp property, there is a reasonable shortcut: the existing permits. Reasonable due diligence must include connecting with those agencies and regulators with whom the future of camp rests. There’s no reason to expect straight As. No operation is flawless. Reviewing past reports by and speaking with sanitarians, fire marshals, and environmental regulators, you stand to gain a lot of insight into what the operation’s past sticking points have been.

If you’re looking at a property without an existing camp, getting an idea of what awaits could be a little trickier. One super resource is the regional American Camp Association’s executive team. While they may not have the details that old reports would provide, they will be able to introduce you to other camp executives in your county or region who can tell you what their experience has been. Besides, what better way to begin your journey toward ACA accreditation than introducing yourself to the people who make it work?

Buying real estate for camps can be both exciting and frightening for someone preparing to take a giant plunge into making camp their life — for life. Take the worry out of some of that by developing a plan that can be financed, and then be prepared to ask questions.

Rick Stryker is a professional engineer who is passionate about camps and the opportunities that they provide. He’s always delighted to answer email questions at rstryker@reagan.com.