Case Study · Texas · RV Resort & Campground · USDA B&I
RV Resort Feasibility Study, Texas — A USDA B&I Worked Case
This is how our independent feasibility study company and feasibility consultant team analyzed a new-build destination RV resort underwritten to a USDA Business and Industry guaranteed loan, from drive-market visitation and seasonality through the debt-service coverage a rural lender must document. It is an anonymized composite of a typical engagement of this type — a roughly 130-site RV resort with cabins and amenities on a lake-tourism corridor in the rural Texas Hill Country — not a specific named borrower or transaction.
A destination RV resort on a Hill Country lake corridor.
A sponsor came to our feasibility study company with a ground-up destination RV resort and a USDA Business and Industry (B&I) lender that needed the projected cash flow independently tested before it would commit. The subject is roughly 46 acres on a lake-tourism corridor in the rural Texas Hill Country, programmed for about 130 sites — 110 full-hookup RV sites weighted toward premium pull-through and destination pads, plus 20 rental cabins — anchored by an amenity core of a pool, clubhouse, splash pad, pickleball, a boat dock, and a camp store.
Because an RV park is a going-concern operating business rather than passive real estate, the lender's question is not “what is the land worth” but “can this specific resort generate the occupied site-nights, rate, and ancillary spend to service this specific loan.”14 USDA is prescriptive about when that question must be answered by an outside party: 7 CFR Part 5001 requires a feasibility study prepared by an independent qualified consultant for any guaranteed loan over $1 million to a new entity, which is precisely this deal.5 Our scope was the independent demand, seasonality, competition, and debt-service analysis that supports the B&I credit, built to the five feasibility components the regulation names.
Drive-market visitation, seasonality, and per-site demand.
The demand read starts with trips and drive-market visitation, not a blended occupancy applied to a site count. Parks within a 30-to-60-minute drive of a major attraction consistently outperform remote locations on both occupancy and rate, and the subject sits inside that band on a Hill Country lake.
Texas is the largest RV-park market in the country, with roughly 3,000 parks, set inside a roughly $10.9 billion U.S. campground and RV-park industry, and national camping demand has normalized above its pre-pandemic level at just over 52 million households — a durable base, but one to underwrite to normalization rather than to renewed boom.1267 The value-driving discipline in this asset class is occupancy basis. A typical independent park runs 60 to 70 percent on an annual site-nights basis, peaking near 100 percent in prime season; that number must never be blended with the 97-to-99-percent annual-lease occupancy the REITs report, which counts long-term contracts rather than nightly turns.13 We modeled the RV sites at a stabilized 62 percent annual site-nights occupancy — strong summer lake peak, graded shoulder, thinner winter — at a blended $68 nightly rate inside the $60-to-$150-plus premium destination range.11
On that basis the RV sites support roughly $1.69 million a year, about $15,400 per site — the upper end of the national range, consistent with an amenity-rich destination resort against roughly $8,000 for a basic park.10 The 20 cabins, at a higher $165 rate and a 55 percent occupancy, add about $0.66 million, and ancillary revenue from the camp store, activities, boat and kayak rentals, propane, and laundry contributes about $0.50 million — 17.5 percent of the total, inside the 10-to-25-percent band, with site and cabin rentals still producing better than 80 percent of gross income.11 Every line is graded onto an 18-to-24-month ramp rather than credited at stabilized levels on day one.
| Demand driver | Basis | Supported figure |
|---|---|---|
| Drive market | Hill Country lake corridor; 30–60 min attraction draw11 | Destination visitation base |
| RV site occupancy | ~62% annual site-nights (near 100% summer peak)13 | Peak / shoulder / off-season graded |
| RV site rental | 110 sites × ~62% × ~$68 ADR11 | ≈ $1.69M/yr (~$15,400/site) |
| Cabin rental | 20 cabins × ~55% × ~$165 ADR | ≈ $0.66M/yr |
| Ancillary (store, activities, propane) | ~17.5% of gross; rentals >80% of income11 | ≈ $0.50M/yr |
| Total stabilized revenue | Site + cabin + ancillary | ≈ $2.85M/yr |
Per-site revenue, rate, occupancy-basis, and ancillary logic grounded in RV-park operating benchmarks; see sources 10, 11, and 13. Figures are illustrative of the engagement type.
A destination gap in a fragmented, older supply base.
Texas leads the nation in park count, but the corridor's standing supply is older, independently owned, and thin on destination amenities. The competitive question is not raw site count but whether any nearby park offers the resort experience the subject is built to deliver.
| Competitor | Type | Sites | Distance | Read |
|---|---|---|---|---|
| Park A | Independent, basic | ~60 | 6 mi | Older utilities, no cabins, few amenities |
| Park B | Independent, seasonal-heavy | ~85 | 9 mi | Mostly annual/seasonal; little transient inventory |
| Park C | Franchise-affiliated | ~120 | 14 mi | Strongest amenity program; off-corridor, off-lake |
| Park D | County / public | ~40 | 5 mi | Public campground; demand generator, not direct comp |
| Park E | Independent, lakefront | ~70 | 18 mi | Lake access but dated; no destination amenities |
| Park F | Announced / permitted | ~90 (planned) | 22 mi | Pipeline site; monitored, not yet open |
Competitive set surveyed for the engagement; anonymized. Announced and permitted supply was scanned, not just the standing set, and public campgrounds were treated as demand generators rather than direct competitors.
No competing park within the corridor pairs genuine lake frontage with a full destination amenity core. The nearest parks are older and basic (Park A) or annual-heavy with little transient inventory (Park B); the strongest amenity offering (Park C) is a franchise site set off the lake and off the corridor's leisure flow; the one lakefront comp (Park E) is dated and eighteen miles out. A rigorous feasibility study does not stop at the standing set: it scans announced and permitted supply so the capture forecast is not quietly overstated by parks the trailing data cannot yet see, and it underwrites to a normalizing demand curve — RV shipments have stepped down from their 2021 peak to a 314,000-unit forecast median for 2026 — rather than to boom-era growth.8 Here the read is a genuine destination gap the subject fills, rather than another transient park splitting a saturated trade area.
Texas: deep RV demand, and mostly rural land.
The state backdrop is a tailwind for a Hill Country destination resort, tempered by construction cost. Texas is the nation's second-largest economy at roughly $2.9 trillion of GDP, held about 31.3 million residents as of July 2024, and leads the country in in-migration.
Two features of Texas make it unusually well-suited to a rural RV resort on USDA capital. First, it is the largest RV-park market in the country, with roughly 3,000 parks, and the Hill Country is a recognized destination and workforce-and-tourism corridor rather than a marginal market.12 Second, although more than 90 percent of Texans live in metropolitan counties, only about 4.5 percent of the state's land area is ineligible for USDA rural programs — so a lake-corridor site in the Hill Country is comfortably rural-eligible, and B&I credits route through the Texas Rural Development state office in Temple.3 The state also carries no personal income tax and, decisively for outdoor-hospitality supply, no Certificate of Need or comparable permit gate, so a well-conceived resort competes on product rather than on a scarce license.2
The offsetting reality is cost and seasonality. A destination build — cabins, a pool, a clubhouse, a dock, and full 30- and 50-amp hookups at every pad — is capital-intensive, so the feasibility test turns on whether stabilized cash flow covers a leveraged cost basis, not on optimistic peak-season revenue. Seasonality and demand attrition are the disciplined analyst's twin cautions here: the Rio Grande Valley's Winter Texan population, for instance, has fallen from a record 144,000 in 2009–2010 toward the 90,000s, a reminder that a Texas leisure-tourism pro forma cannot capitalize a single peak season as if it repeated all year.1 Our model grades a summer-weighted curve and holds off-season fixed costs against reserves rather than against peak revenue.
Why the corridor fills the sites.
Drive-market population, attraction proximity, and lake frontage all point the same direction, and the site geometry converts that demand into occupied site-nights and longer stays.
The resort sits within a 30-to-60-minute drive of a Hill Country lake and its associated attractions, inside the proximity band where parks reliably outperform remote sites on both occupancy and rate.11 The regional drive market pulls from the fast-growing central Texas metros, whose in-migration and household growth keep the leisure-travel base expanding rather than contracting — the demand engine a new destination resort needs.1 Because Texas has no license-based cap on supply, the site's advantage has to be earned in product and location, not protected by a permit.
Geometry and program do the rest. Direct lake access, premium pull-through pads, and the cabin and amenity core lengthen the average stay and lift the achievable rate, moving the subject from a transient overnight stop toward a multi-night destination — the difference between a basic park's roughly $8,000 per site and the $15,000-plus an amenity-rich resort supports.10 The nearest lakefront competitor is dated and eighteen miles out, and no closer park offers the same resort experience, which is why the model credits the subject with an upper-range per-site revenue placement rather than a corridor-average one.
The USDA B&I guaranteed structure.
Total project cost lands at $11.6 million. USDA B&I is built for exactly this borrower — a rural, owner-operated hospitality business — guaranteeing a share of a conventional lender's loan so the credit can be made on a going-concern basis.
| Cost component | Amount |
|---|---|
| Land (~46 acres, lake corridor) | $1.70M |
| Site development, 110 RV sites (pads, roads, 30/50-amp, water, sewer) | $3.05M |
| Cabins (20 units) | $1.90M |
| Amenity core (pool, splash pad, clubhouse, pickleball, dock, store) | $2.15M |
| Soft costs, engineering & NEPA / permitting | $0.85M |
| Contingency | $0.70M |
| Working capital, interest reserve & fees | $1.25M |
| Total project cost | $11.60M |
Site-development cost of ~$27,700 per RV site sits within the $15,000–$50,000 all-in range for full-hookup destination pads; see source 10.
| Item | Figure |
|---|---|
| USDA B&I guaranteed loan (75% of cost) | $8.70M |
| Borrower equity injection (25% of cost) | $2.90M |
| Term / amortization | Fully amortizing / 25-year |
| Illustrative rate | ~8.5% |
| Annual debt service | ≈ $841k |
USDA B&I under the OneRD rule (7 CFR Part 5001): up to a 25-year amortization on real-estate-heavy projects; rural communities of 50,000 or fewer; feasibility study required over $1M to a new entity. See sources 4 and 5.
Two numbers here are distinct and worth separating. The 75 percent is loan-to-cost: the lender advances $8.70 million against a 25 percent, $2.90 million borrower equity injection. The B&I guarantee is a different figure — the share of that loan USDA guarantees to the lender — which reaches up to 80 percent on facilities of $5 million or less (with an enhanced 85 percent available on smaller loans in fiscal 2026) and steps to 70 percent in the $5-to-$10 million band the $8.70 million facility falls in.34 On a 25-year amortization at an illustrative 8.5 percent, annual debt service is about $841,000 — the number the projected coverage has to clear. Because a ground-up resort does not stabilize on day one, the capital budget funds an interest reserve that carries the ramp-year shortfall, and the NEPA environmental review the program requires runs in parallel to the study rather than inside it.5
Feasible and bankable, on coverage the credit can document.
The stabilized model builds revenue from three engines — RV sites, cabins, and ancillary — nets a through-cycle operating expense ratio, and carries the coverage from a sub-1.0 ramp year to a 1.55x stabilized DSCR.
| Line | Basis | Amount |
|---|---|---|
| RV site rental | 110 sites × ~62% occ × ~$68 ADR11 | ≈ $1.69M |
| Cabin rental | 20 cabins × ~55% occ × ~$165 ADR | ≈ $0.66M |
| Ancillary revenue | Store, activities, boat/kayak, propane, laundry11 | ≈ $0.50M |
| Total revenue | Site + cabin + ancillary | ≈ $2.85M |
| Operating expenses | ~54% of revenue: seasonal labor, utilities, R&M, insurance, property tax, management, marketing, reserves10 | ≈ ($1.55M) |
| Net operating income (NOI) | Revenue less operating expense | ≈ $1.30M |
The ~54% operating-expense ratio sits within the 50–70% band for the sector and above the 50% floor below which a pro forma reads as a red flag; stabilized NOI is an 11.2% yield on the $11.6M cost. See sources 10 and 11.
| Year | Stage | NOI | Debt-service basis | DSCR |
|---|---|---|---|---|
| Year 1 | Opening / ramp | ~$0.80M | Full amortizing ~$841k | 0.95 |
| Year 2 | Building | ~$1.09M | Full amortizing ~$841k | 1.30 |
| Year 3 | Stabilized | ~$1.30M | Full amortizing ~$841k | 1.55 |
DSCR computed as NOI divided by the ~$841k annual debt-service obligation. The Year-1 shortfall below 1.0x is funded by the interest reserve in the capital budget. Ramp graded over 18–24 months. See sources 4 and 11.
The stabilized 1.55x coverage is the figure the lender documents, and it clears the roughly 1.25x DSCR that B&I lenders typically require with real headroom. By Year 2 the resort already covers fully amortizing debt service at 1.30x. The Year 1 figure of 0.95x is intentionally below 1.0 — it is the ramp year — which is exactly why the capital budget carries an interest reserve: the reserve covers the shortfall while occupancy climbs, and permanent coverage is measured once the resort reaches its supportable site-nights. Crediting peak-season rate and high stable occupancy at the same time, or modeling stabilized amenity revenue in Year 1, is one of the most common ways outdoor-hospitality pro formas fail review; the ramp here is deliberately graded.13
On the equity side, the $2.90 million injection earns growing levered free cash flow — essentially covered by the reserve in the ramp year, then building past $0.45 million a year once stabilized and net of an FF&E and amenity reserve. The exit is valued on a going-concern basis, not a leased-fee cap rate: an RV resort is an owner-operated business, and capitalizing a Year-10 stabilized NOI near $1.49 million at a going-concern overall rate around 9.25 percent — essentially the 9.3 percent average across the parks that transacted in 2024, and inside the 8-to-12 percent range the market applies — implies a gross value near $16.2 million, and roughly $8.5 million of net equity after selling costs and the outstanding B&I balance.9 Holding growth modest and underwriting to a normalized rather than a boom demand curve,8 the blended result is an illustrative levered equity IRR of about 19 percent over a 10-year hold.
Verdict: financially feasible and bankable. On independently derived demand, a stabilized 1.55x DSCR, and a ~19% levered equity IRR, the projections support the USDA B&I credit.
Independent demand, seasonality, competition, and the five USDA components.
The engagement was scoped the way a USDA reviewer reads it: to the five feasibility components 7 CFR Part 5001 names — economic, market, technical, financial, and management — each evaluated by an independent qualified consultant with no interest in the project.5 As a feasibility consultant, our role is to test the sponsor's projection against the market, not to restate it; the value of the deliverable is precisely that it carries no stake in the outcome. We derived occupancy on a site-nights basis and reported it by peak, shoulder, and off-season rather than as a single annualized figure, and we kept the transient and annual streams separate so the model never credits peak rate and stable occupancy at once.
The coverage analysis was then stress-tested. We ran the debt-service coverage against occupancy and rate downside — the two variables a seasonal resort is most exposed to — to confirm the credit still holds when a soft season or rate compression arrives, the way a prudent operator tracks coverage against fixed debt service. One scope boundary is worth stating plainly: as the feasibility consultant we reference, but do not perform, the NEPA environmental review the B&I program requires, which runs in parallel to the study.4 That combination — the five components, an occupancy read on the right basis, a competitive scan including the pipeline, and a stressed DSCR — is what lets the lender rely on the file.
Underwriting a Texas RV resort for a USDA loan? Start with the feasibility study.
Feasibility Study Company prepares independent RV park and campground feasibility studies for USDA Business and Industry and SBA credits, built to the five components and the coverage standard your rural lender must document. A methodology briefing walks through the drive-market demand, seasonality, competition, and DSCR analysis behind a case like this one, calibrated to your corridor and format.
Request a methodology briefingData sources and dates.
The deal figures are illustrative of the engagement type; the market data that grounds each dimension is real and sourced, drawn from our standing Texas, RV Park & Campground, and USDA Rural Development analyses and the primary authorities they cite.
- U.S. Census Bureau, Vintage 2024 Population Estimates (Texas population ~31.3 million as of July 1, 2024; Texas leads the nation in in-migration), with University of Texas Rio Grande Valley Winter Texan studies (record ~144,000 in 2009–2010 declining toward the 90,000s) as a demand-attrition caution, as compiled in the firm's Texas market analysis.
- Texas Comptroller of Public Accounts, Texas economy and GDP data (Texas the 2nd-largest U.S. economy, ~$2.9 trillion GDP; 90%+ of Texans in metropolitan counties; no state personal income tax); National Conference of State Legislatures on Certificate of Need (Texas has no general CON law), as compiled in the firm's Texas market analysis.
- USDA Rural Development, Texas state office (Temple), fiscal 2026: USDA Business and Industry guaranteed loans route through the Temple state office, with an 85% guarantee available on loans under $5 million; only about 4.5% of Texas land area is ineligible for USDA rural programs, so the large majority of the state qualifies as rural.
- USDA Rural Development, Business & Industry (B&I) program under the OneRD Guaranteed Loan rule (7 CFR Part 5001, effective October 1, 2020): guarantees up to 80% on loans up to $25 million ($40 million select), stepping down by loan size; rural communities of 50,000 or fewer population; up to a 25-year amortization; feasibility study required for loans over $1 million; NEPA environmental review.
- 7 CFR Part 5001 (USDA OneRD Guaranteed Loan rule): a feasibility study prepared by an independent qualified consultant is required for a guaranteed loan greater than $1 million to a new entity or an entity conducting a new activity, evaluating the economic, market, technical, financial, and management feasibility of the project (the five components); as compiled in the firm's USDA Rural Development practice analysis.
- IBISWorld, Campgrounds & RV Parks (NAICS 72121): U.S. industry revenue of ~$10.9 billion in 2025 (up 2.5%), across roughly 16,000–17,000 establishments, with the 2020–2025 CAGR flagged as artificially boom-inflated.
- KOA 2026 Camping & Outdoor Hospitality Report (via SGB Media): over 52 million North American camping households in 2025, above the 42.0 million of 2019 but below the 58.5 million 2022 peak — demand normalized above pre-pandemic levels but no longer growing.
- RV Industry Association (RVIA) and ITR Economics, RV RoadSigns forecast (Summer 2026 edition): wholesale shipments of 342,220 units in 2025 and a 314,000-unit forecast median for 2026 (down 8.2%), against a 600,240-unit 2021 peak — the basis for underwriting to normalization rather than boom-era growth.
- Parks & Places, via RVBusiness (December 2024): a 9.3% average cap rate across 21 parks sold in 2024, with average time-on-market of 8.8 months; broker and analytical ranges of 8–12%, with resort-quality destination assets sometimes at 6–8% and value-add or tertiary parks at 10–14%+; EV/EBITDA multiples generally 4.0–7.0x.
- Loan Analytics / MMCG and Innowave Studio (2024–2025): revenue per site of roughly $8,000 (basic park) to $15,000+ (upscale resort), all-in development cost of $15,000–$50,000 per site (utility line items $5,000–$15,000/site), and the 50–70% operating-expense band, with an expense ratio materially below 50% flagged as a red flag.
- RoverPass, RJourney, RV Podcast, Financial Models Lab, and SDRetirementPlans (2025–2026): transient nightly rates ($35–$90 standard, $60–$150+ premium destination), annual/seasonal snowbird rates ($400–$1,200/month), ancillary-revenue share of 10–25% with site rentals producing 80%+ of gross income, the 30-to-60-minute attraction-proximity outperformance, weekly DSCR tracking for seasonal operators, and a graded 18-to-24-month ramp.
- RVParkIQ (2025): geographic concentration of U.S. RV-park supply, with Texas holding roughly 3,000 parks (the most of any state), Florida 1,000-plus, and California 919; ownership is fragmented (about 88% independent, 2% REIT).
- Equity LifeStyle Properties (ELS) and Sun Communities (SUI) disclosures (2024–2026): ELS derived 91% of revenue from annual sources as of December 31, 2024; independent parks run ~60–70% annual site-nights occupancy (near 100% in peak) versus the 97–99% annual-lease occupancy the REITs report, two bases that must never be blended.
- Sage Outdoor Advisory and BBG (MHC/RV appraisal practice), 2025; RV Park University: RV parks are valued as going concerns (real estate plus FF&E plus business and intangibles), with the income approach on a going-concern basis and a ten-year discounted-cash-flow for a proposed property, allocated across real estate, FF&E, and business value under USPAP Standards 7 and 8.