Campground Due Diligence: 47-Point Checklist Before You Close

Due diligence represents your single opportunity to identify problems before committing irrevocable capital to a campground acquisition. A hastily conducted due diligence process that misses critical issues can mean the difference between a profitable acquisition and a catastrophic loss.

Campground due diligence is more complex than typical commercial real estate transactions because you are evaluating not just physical assets but an operating hospitality business with revenue streams, operational dependencies, regulatory compliance requirements, and environmental liabilities. Problems hidden in any of these categories can undermine financial projections and destroy investor returns.

This comprehensive 47-point checklist ensures you systematically evaluate every significant risk category before closing. Most successful campground acquisitions require 30-45 days of disciplined due diligence execution. Rushing this process or skipping items because “the property looks good” has destroyed numerous campground investments.

Financial Due Diligence (15 Items)

1. Three Years of P&L Statements

Obtain 3 years of complete profit and loss statements from the seller’s accountant or bookkeeper. These statements should show revenue by category (nightly sites, long-term rentals, amenity revenue, ancillary services) and expense breakdowns. Request reviewed or audited statements from an accountant, not just seller-prepared spreadsheets. Reviewed statements carry minimal audit risk - accountants have confirmed the numbers reconcile to source documents.

2. Income Tax Returns

Obtain the seller’s business tax returns for the same 3-year period (1120-S for S-Corps, 1065 for partnerships, Schedule C for sole proprietors). Compare tax-reported income against owner-adjusted P&L statements. Significant discrepancies raise concerns - either the financials are misrepresented or the owner has tax issues.

3. Bank Statements

Obtain 12 months of recent bank statements for the primary operating account. Verify that deposits match claimed revenue figures. Look for gaps or unusual patterns suggesting underreported revenue or financial instability.

4. Reservation System Data

Request detailed occupancy data by month for the past 3 years from the reservation system. Export data showing nightly occupancy, average daily rate (ADR), total revenue by month, and long-term rental data. This granular data often contradicts claimed occupancy percentages.

5. Security Deposit Records

Obtain documentation showing all guest security deposits currently held. These funds typically transfer to the buyer at closing and represent a liability. Large security deposit balances suggest either exceptional occupancy (justified deposits) or operational problems (guests withholding occupancy confidence).

6. Current Year Projections

Obtain the seller’s current year financial projections. Compare these projections against actual results month-to-date. Wide variances between projections and reality suggest either inaccurate forecasting or deteriorating business performance.

7. Capital Improvement History

Compile a complete capital improvement history for the past 10 years with dates, costs, and improvements made. This shows maintenance commitment, capital deployment, and anticipated future needs. Properties with minimal capital investment over 10 years typically require significant near-term spending.

8. Outstanding Liens and Judgments

Order a UCC search and judgment lien search for the owner and business entity. Unpaid liens or judgments may transfer to the property at closing or create title complications. Title insurance typically provides protection, but identifying these issues in advance allows negotiation.

9. Accounts Receivable Detail

Request detail on all accounts receivable - specifically long-term rentals and credit card charges. Identify which receivables are current versus past due. Aging receivables suggest collection problems or operational dysfunction.

10. Deferred Maintenance Reserve Analysis

Conduct a thorough inspection and compile a capital reserve estimate for deferred maintenance. Create a spreadsheet estimating the cost to address items from facility inspection. This reserve, typically 5-10% of annual revenue, should reduce your offer if deferred maintenance is significant.

11. Historical Guest Demographics and Satisfaction

Request reviews from major review platforms and analyze guest satisfaction trends. Declining reviews despite stable occupancy suggests deteriorating property condition or service quality issues. Review social media presence and guest feedback patterns.

12. Seller Adjustment Documentation

For any owner-adjusted EBITDA claims, require detailed documentation supporting adjustments. A seller claiming $150,000 in “discretionary owner draws” should document specific non-recurring expenses or personal expenditures included in the P&L.

13. Franchise or Affiliation Agreements

If the property operates under a brand (KOA, Kampgrounds of America) or affiliation, obtain complete agreement terms. Understand royalty rates, termination provisions, and ongoing compliance requirements. Some franchises impose restrictions that limit operational flexibility.

14. Supplier and Service Contracts

Request a schedule of all significant supplier and service contracts (utilities, waste management, maintenance contracts, landscaping). Identify contracts with auto-renewal clauses or early termination penalties.

15. Outstanding Receivables and Payables

Request current accounts payable aging and any significant outstanding payables. Large balances suggest either normal operational timing or payment delays indicating cash flow problems. Verify which payables transfer to buyer versus seller.

Physical Property Inspection (12 Items)

16. Electrical System Inspection

Hire a licensed electrician to evaluate the main electrical infrastructure serving the property. Verify capacity for current and future needs, code compliance, grounding systems, and safety. Properties with 30+ year old electrical systems often require significant upgrades.

17. Water and Sewer Infrastructure

Inspect water lines, distribution systems, and sewer connections. Identify any main line issues, aging pipes requiring near-term replacement, or capacity limitations preventing expansion. Test water quality if not connected to municipal systems. Well water requires annual testing.

18. Road and Parking Infrastructure

Inspect all roads, parking areas, and driveways. Obtain estimates from local asphalt/gravel contractors for restoration costs. Poorly maintained roads create safety liability and negative guest experience.

19. Bathhouse and Restroom Facilities

Conduct thorough inspection of all bathhouse buildings, fixtures, and systems. Test all plumbing, verify cleanliness standards, assess renovation needs. Bathhouse condition significantly impacts guest satisfaction and operational costs.

20. Hookup Pedestal Inspection

Inspect individual electrical pedestals at each site. Test power delivery, verify proper grounding, identify any non-functioning pedestals. Aging pedestals often require replacement during ownership.

21. WiFi Infrastructure

Test WiFi signal throughout the property. Verify coverage, speed, and system reliability. Modern guests expect robust WiFi - inadequate systems create significant satisfaction and competitive disadvantage.

22. Roof Condition Assessment

Hire a roofing inspector to evaluate the main building roof, bathhouse roofs, and any other structures. Request detailed estimate for roof replacement if needed. Roof failures during ownership create emergency expenses and operational disruption.

23. Common Area Facilities

Inspect swimming pools (if present), playgrounds, gathering spaces, and recreation equipment. Evaluate maintenance condition and safety compliance. Pool facilities require specialized equipment and ongoing maintenance costs.

24. Signage and Entrance Presentation

Evaluate property signage, entrance appearance, and curb appeal. Assess branding consistency and marketing first impression. Marketing first impression impacts reservation volume and rate achievement.

25. Utility System Redundancy

Verify backup power systems, water storage capacity, and critical infrastructure redundancy. Properties with single points of failure for utilities face operational risks during service interruptions.

26. Laundry and Guest Service Facilities

Inspect laundry equipment, vending machines, dump stations, and other guest service infrastructure. Evaluate maintenance condition and revenue generation. These amenities impact guest satisfaction and create additional revenue opportunities.

27. Camp Store and Administrative Facilities

Inspect any camp store, office facilities, and storage areas. Evaluate inventory value (if included in purchase), facility condition, and operational functionality.

Legal and Permit Review (10 Items)

28. Campground Operating License

Verify that the campground operating license is current and in good standing with state/local authorities. Request documentation showing license history and any prior violations or compliance issues.

29. Health Department Permits

Obtain current health department permits and inspection records. Review any outstanding violations or remediation requirements. Identify any areas subject to conditional operating status.

30. Fire Safety and Code Compliance

Request fire safety inspections and ADA compliance documentation. Verify compliance with NFPA codes and local fire codes. Properties with code violations face operational limitations and liability exposure.

31. Zoning Verification

Obtain current zoning documentation confirming the property’s zoning classification and permitted uses. Verify no zoning violations exist. Some properties operate under conditional use permits requiring periodic renewal.

32. Easements and Boundary Documentation

Review property survey and title documentation identifying any easements, rights-of-way, or boundary disputes. Easements may limit development or operational flexibility.

33. HOA Documents and Covenants

If the property is subject to HOA restrictions or deed covenants, obtain complete documentation. Verify no restrictions prevent intended operations.

34. Franchise Agreement Terms and Termination Rights

If branded, obtain the complete franchise agreement. Understand termination rights, transition requirements, and post-termination brand restrictions. Some franchises prohibit branding removal for significant periods.

35. Employment Agreements and Non-Compete Provisions

Obtain copies of all employment agreements for manager and key staff. Identify any non-compete provisions that might restrict rehiring or operational changes. Understand severance obligations if employment is terminated.

36. Insurance and Liability Policies

Request current insurance policies (general liability, property, workers compensation). Verify coverage limits are adequate for the property type and size. Identify any coverage gaps or exclusions.

37. Litigation History

Conduct litigation searches for the owner and business entity. Identify any outstanding lawsuits or prior judgments. Properties with histories of guest injury litigation may signal operational or maintenance problems.

Environmental and Land Assessment (5 Items)

38. Phase I Environmental Site Assessment

Hire a qualified environmental professional to conduct Phase I ESA evaluating for historical contamination, underground storage tanks, wetlands, or other environmental concerns. This assessment identifies potential liabilities before closing.

39. Underground Storage Tanks

Confirm whether any underground storage tanks (fuel, propane, water) exist on the property. If present, obtain maintenance records and verify regulatory compliance. Abandoned tanks require proper remediation.

40. Wetlands Delineation

If the property includes potential wetland areas, obtain wetlands delineation confirming whether regulated wetlands exist. Wetlands restrict development and require federal/state permits for alterations.

41. Flood Zone Mapping

Verify the property’s flood zone designation through FEMA flood maps. Properties in 100-year or 500-year flood zones may face insurance restrictions or development limitations.

42. Water Well Testing (If Applicable)

If the property operates private wells, obtain recent water quality testing confirming compliance with EPA standards. Contaminated wells require expensive remediation or connection to municipal water systems.

Operations Review (5 Items)

43. Manager Interview and Assessment

Conduct confidential interviews with the current manager to assess operational competence, understanding of systems, and willingness to stay through transition. Determine whether management changes are necessary for operational improvement.

44. Staff Retention and Capabilities

Interview key staff and assess capabilities. Identify positions requiring replacement or additional training. Understand staff compensation and any unionization or employment complications.

45. Supplier and Vendor Relationships

Meet with key suppliers and vendors to understand service relationships, pricing, and any operational dependencies. Identify potential for renegotiating contracts or changing vendors to improve operations.

46. Reservation System Audit

Conduct detailed audit of the reservation system including historical data integrity, current pending reservations, and customer database quality. Understand transition requirements for booking systems if changing platforms.

47. Online Reputation and Review Audit

Systematically audit the property’s presence on major review platforms (Google, Yelp, TripAdvisor, RVing platforms). Analyze review trends over 3+ years for declining satisfaction, recurring complaints, or reputation damage. Low scores on major platforms impact future booking success.

What to Do With What You Find

Once due diligence identifies specific problems, respond systematically:

Price Adjustments Based on Findings

Use due diligence findings to justify price reductions. A comprehensive inspection identifying $50,000 in near-term deferred maintenance justifies a $50,000 price reduction or repair credit. Compile findings into a due diligence report documenting specific issues with supporting evidence and remediation cost estimates.

Repair Credits at Closing

Negotiate repair credits where the seller agrees to reduce purchase price by identified repair costs. This shifts responsibility for repairs to the buyer but reduces upfront capital needs.

Inspection Contingency Removal

Once due diligence is complete and no deal-killing issues are identified, provide written notice removing your inspection contingency. This demonstrates buyer commitment and builds seller confidence toward closing.

Walk-Away Triggers

Establish clear walk-away criteria before starting due diligence. If the property has outstanding code violations, environmental contamination, or financial records that don’t reconcile, these may justify walking away and forfeiting earnest money if necessary. The relatively modest earnest money loss prevents catastrophic acquisition mistakes.

For comprehensive campground valuation guidance on integrating due diligence findings into valuation models, comprehensive guidance on the complete acquisition process, and detailed information about preparing for acquisition success, reference our comprehensive acquisition guides.

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FAQ

How much should I budget for due diligence costs including inspections, environmental assessments, and professional services?

Expect total due diligence costs between $8,000-$20,000 for a $1-2 million property. This includes phase 1 environmental ($1,500-$3,000), professional home inspection ($2,000-$4,000), specialized inspections (electrical, roof, structural: $3,000-$6,000), and professional services (attorney, accountant: $2,000-$5,000). These costs are relatively modest insurance compared to acquisition scale.

Can I conduct due diligence myself or do I need professional help?

While you can personally conduct many due diligence items (reviewing financials, inspecting property, interviewing staff), professional specialists provide significant value. Professional inspectors, environmental professionals, and attorneys catch problems that untrained eyes miss. For complete guidance on the buying process and how due diligence integrates with full campground acquisition procedures, review our comprehensive buyer’s guide. The majority of financial and operational due diligence is appropriately conducted by the buyer personally.

How long does the typical due diligence period last?

Most campground acquisitions include 30-45 day due diligence periods from contract signing to contingency removal. This timeline allows systematic inspection, professional review, and financial analysis. Expedited timelines (15-20 days) limit thorough investigation and increase acquisition risk.

What’s the most commonly missed due diligence item that causes buyer problems?

The most commonly missed item is thorough staff and management assessment. Buyers often overestimate inherited staff capability or underestimate management workload, leading to post-acquisition operational problems. Spend substantial due diligence time interviewing staff and realistically assessing whether existing management can continue or requires replacement.

If I find significant problems during due diligence, should I still close or walk away?

Significant problems typically fall into three categories: financial misrepresentation (walk away - fundamental trust breach), manageable physical issues (negotiate price reduction or repair credits and proceed), or operational dysfunction (seriously reconsider - operational improvement is significantly harder than property improvement). Most problems are manageable with proper price adjustment, but some indicate deeper issues suggesting walk-away decisions.