SBA 7(a) Feasibility Study Case Study: A Snowbird RV and Manufactured Housing Resort in Weslaco, Texas That Fails the Transient Test

A 389-lot, 55-plus resort community on 28 acres at 2300 East Business Highway 83 in Weslaco, Hidalgo County, Texas, in the heart of the Rio Grande Valley's Winter Texan market, marketed at $7,900,000, with 112 manufactured home lots, 189 park model lots and 88 RV sites, city water and sewer, and a resident base that stays an average of 4.4 months. Presented for an SBA 7(a) acquisition loan, the park earns about 6 percent of its revenue from guests who stay 30 days or less against the more-than-50-percent threshold of SOP 50 10 8, and 301 of its 389 lots are manufactured home and park model spaces, which SBA treats as a mobile home park. Not eligible for SBA. Underwritten as a manufactured housing and RV community under conventional debt at 70 percent of price, the park covers at 1.66x in Year 1 and 1.99x in Year 5. Determination: not eligible for SBA; feasible under conventional financing as a manufactured housing community.

Model study prepared by MMCG Invest | Michal Mohelsky, J.D., FMVA | October 2, 2026

MMCG concludes that the acquisition of Magic Valley Resort in Weslaco, Texas is not eligible for SBA 7(a) financing and is feasible under conventional financing as a manufactured housing and RV community. The eligibility finding rests on two provisions of SOP 50 10 8 and it is not close. Recreational vehicle parks and campgrounds are eligible businesses only if more than 50 percent of revenue for the prior year is derived from transients who stay for 30 days or less at a time; on the study's revenue model, which follows the park's published product of monthly, six-month and annual leases on manufactured home, park model and RV lots, revenue from stays of 30 days or less is about 5.4 percent of the total and revenue from stays over 30 days is about 92 percent. Mobile home parks are ineligible, and 301 of the park's 389 lots, 77 percent, are manufactured home and park model spaces. Either finding alone disqualifies the loan; together they define the asset class, which is a 55-plus manufactured housing community with an RV component, not an RV park.

Underwritten to the lender that finances that asset class, the park is a sound credit. At the asking price of $7,900,000, or $20,308 per lot, and a Year 1 net operating income of $861,805 built from rents and occupancies inside the published range of the Rio Grande Valley's competing resorts, the park trades at a 10.9 percent capitalization rate, above the 9.00 percent Newmark prints for Class C RV parks and well above the 5.25 to 6.00 percent it prints for manufactured housing communities, which reflects the park's age, its 55-plus restriction and the slow decline of the Winter Texan population. A conventional loan at 70 percent of price, $5,530,000 at 7.75 percent over 25 years, covers at 1.66x in Year 1 and 1.99x in Year 5, and the park holds coverage above 1.0x in every sensitivity case including a combined 10 percent rent decline and 10-point occupancy decline. The determination is conditioned on the rent roll and a stay-length ledger confirming the revenue mix, a bound private windstorm quote, a Phase I and the city's utility accounts.

This is an MMCG model study: a complete feasibility analysis performed on a real, publicly marketed property using public data, prepared to show SBA lenders and buyers what the transient test does to a snowbird resort and how MMCG writes the same park to the lender that can finance it. It is not a client engagement, MMCG has no relationship with the seller, the operator, the listing broker or any prospective buyer, and the analysis does not represent an offer, an appraisal, a business valuation or a recommendation to buy the park. Figures drawn from the listing, the operator's published materials, the University of Texas Rio Grande Valley's Winter Texan survey, the Texas Windstorm Insurance Association and competing parks' own websites are identified as such. Figures labeled MMCG assumption are underwriting inputs set by MMCG from industry benchmarks, and items that could not be verified from a primary source at the study date are listed in the Conditions and Limitations section rather than estimated silently. In particular, the park's rent roll, trailing financial statements, lease terms and reservation data, its seasonal and monthly rate card from the operator's own website, the current listing status, the Hidalgo County assessment and the park's windstorm coverage were not confirmed from primary sources at the study date and are carried as stated assumptions.

The Project will operate as a 55-plus manufactured housing and RV resort community on 28 acres at 2300 East Business Highway 83 in Weslaco, Hidalgo County, Texas, on the Business 83 corridor between McAllen and Harlingen that holds the greatest concentration of Winter Texan resorts in the state. The physical program comprises the existing 389 lots: 112 manufactured home lots leased on annual terms to resident-owned homes, 189 park model lots leased on annual and six-month terms to resident-owned park models, and 88 full-hookup RV sites of which about 60 are sold on six-month winter contracts, about 20 on monthly summer terms and the balance held for nightly and weekly guests, together with a clubhouse with a ballroom and kitchen, a heated pool and spa, shuffleboard and pickleball courts, a woodshop and hobby rooms, laundries and an activities program, all served by city water and sewer submetered to the lots. The park will be operated under third-party management at a 5 percent fee with an on-site manager, an activities director, maintenance and grounds staff of about eight full-time equivalents in season and four in summer, open year-round with its activities program running October through March. The buyer will hold the land, improvements and business in a single entity that is the conventional borrower, with the buyer's principals providing guarantees to the lender's requirement. The Project is positioned at the center of the Valley's resort range, at $450 monthly for a manufactured home lot, $420 for a park model lot and $600 monthly on a six-month RV contract, against competing resorts that publish $349 to $1,359 monthly and $2,400 to $5,339 for six months.

Marketing and Sales Strategy

The park's revenue is sold a season ahead. Six-month RV contracts and park model renewals for the coming winter are sold from February through April of the prior season at an early-renewal discount, which is the Valley's standard, and the manufactured home lots turn with home sales through the park office and the regional dealers. The primary channel is the resident base itself: Winter Texans return to the same park at rates above 70 percent on the University of Texas Rio Grande Valley surveys, and the activities program, the ballroom calendar and the pool are the retention product. The second channel is the Winter Texan information network, the regional clubs, the Valley's resort directories and the two membership networks, through which first-time visitors are placed at the park's published rates. The third channel is the summer monthly market, which fills about 20 RV sites at $380 with construction, agricultural and medical workers in the Valley's off-season. Transient nightly guests are taken when sites are free and are not a marketing target.

Amenities

The park occupies 28 acres at 2300 East Business Highway 83 in Weslaco, Hidalgo County, Texas, on the north side of the Business 83 corridor that runs through the Valley's resort belt from Mission to Harlingen. Weslaco is a city of about 42,000 in a county of about 900,000, figures carried from the last Census Bureau estimates MMCG reviewed and not re-pulled at the study date, and the McAllen metropolitan area is one of the largest in Texas. The site is level, served by city water and sewer, and lies in Hidalgo County, which is not one of the fourteen first-tier coastal counties of the Texas Windstorm Insurance Association, so the park's windstorm cover is placed in the private market rather than through the Association's residual pool, and the premium is a bound-quote item.

The park's demand is the Winter Texan migration. The University of Texas Rio Grande Valley's 2022 to 2023 Winter Texan survey counted about 57,000 Winter Texan households in the Valley with an average stay of 4.4 months and spending of $13,360 per household, for an economic impact of $761 million; the household count has declined by about 1 to 2 percent a year across the survey series as the generation that built the market ages, and the park's 55-plus restriction places it squarely in that series. The average stay of 4.4 months is the single fact that decides the SBA question: the Valley's resort product is a four-to-six-month stay by construction, and no rate card changes it.

The park is an existing, operating community and the acquisition requires no entitlement. The City of Weslaco's zoning for the parcel and any manufactured housing community licensing requirement were not retrieved at the study date, and the study carries the existing use as conforming, to be confirmed by the buyer's counsel. Texas sets no statewide maximum stay for RV occupants; Chapter 94 of the Property Code governs manufactured home lot tenancies, and Attorney General Opinion KP-0222 of 2018 holds that whether an RV occupant is a licensee or a tenant depends on the terms of the agreement. The park's manufactured home and park model lots are Chapter 94 tenancies with the statute's notice and eviction procedure; the RV contracts are drafted as licenses with a stated term, which the study notes as the operator's practice and the lender's counsel reviews.

City water and sewer are submetered to the lots and billed to residents, which is standard in the Valley and removes the largest variable utility cost from the park's own budget; the park's electric is likewise metered to lots, and the budget carries $105,000 for common-area electric, water, trash and the pool as an MMCG assumption. Property tax is carried at $118,000 in Year 1, or $303 per lot, reflecting a Hidalgo County combined rate near 2.3 percent on an assessed value well below the contract price, escalating 2 percent per year; the certified rate and the appraisal district's assessment are to be confirmed. Insurance is carried at $95,000 in Year 1, or $244 per lot, with the private windstorm layer inside it, escalating 6 percent per year, and the sensitivity table doubles it.

The trade area for a Winter Texan resort is the northern tier, not the Valley. The park's residents come from the Midwest, the Plains and Canada, and the Valley's own demographics describe the labor pool and the summer monthly market rather than the winter guest. Hidalgo County is a young, fast-growing, low-income county, with a median household income near $50,000 and a median age near 30 on the last American Community Survey figures MMCG carried, and that profile supplies the park's staff at the regional wage and its summer monthly tenants at $380. The winter guest is counted through the survey series: 57,000 households, 4.4 months, $13,360 per household, declining slowly.

The demand model counts the Valley's resort inventory and the subject's share. The resort belt holds on the order of 500 parks and 70,000 sites across Hidalgo and Cameron counties on industry counts, and the subject's 389 lots are a fraction of 1 percent of it; penetration is not the question for an existing park with a resident base. The question is retention and rate, and the study answers it with occupancies at or below the park's published positioning: manufactured home lots at 86 percent in Year 1 rising to 90 percent, park model lots at 78 percent rising to 82 percent, six-month RV contracts at 80 percent rising to 88 percent of the 60 contract sites, summer monthly at 90 percent of 20 sites, and transient nightly guests at 6 to 7 percent of the 88 RV sites across the year. The declining Winter Texan series is carried as a flat-to-slow-growth occupancy rather than as a decline, because the Valley's inventory is also aging out and the newer resorts at the top of the rate range are drawing the growth; the sensitivity table carries a 10-point occupancy decline.

MMCG identified six competing resorts in the Valley's resort belt. Five publish rate cards on their own websites and are quoted; the subject's operator's card was not retrieved and is flagged.

Competitor Number 1 Seven Oaks Resort This resort is located in Mission, TX. Its own website publishes monthly rates of $702 to $892 and six-month rates of $3,137 to $3,479, inclusive of amenities, on a 55-plus basis.

Competitor Number 2 Bentsen Palm Village RV Resort This resort is located at 2500 S Bentsen Palm Drive, Mission, TX 78572. Its own website publishes monthly rates of $909 to $1,359 and a six-month rate of $5,339 on its premium sites, the top of the Valley's range.

Competitor Number 3 Bentsen Grove Resort This resort is located in Mission, TX. Its own website publishes a monthly rate of $600 and a six-month rate of $2,400.

Competitor Number 4 Oleander Acres RV Resort This resort is located in Mission, TX. Its own website publishes monthly rates of $425 to $465 and three-month rates of $1,275 to $1,395.

Competitor Number 5 Tropic Star RV Resort This resort is located in Pharr, TX. Its own website publishes a monthly rate of $770 and a six-month rate of $3,750.

Competitor Number 6 Victoria Palms RV Resort This resort is located in Donna, TX, nine miles west of the subject, and is operated within the Thousand Trails system. Its operator's page offers seasonal and annual sites and limits stays to 14 days per site from April 15 to September 15; its posted rates load dynamically and were not retrieved, and an aggregator lists it from $61 nightly.

Tip O'Texas RV Resort in Pharr, Rio Valley Estates in Weslaco and the Valley's other 55-plus communities round out the set and were not retrieved. Victoria Palms' 14-day summer cap is the market's own statement that the Valley is a winter market with a summer transient trickle.

The subject's rents are set inside the published band. Manufactured home lots at $450 monthly and park model lots at $420 sit at the lower-middle of the Valley's 55-plus range for an older park with a full amenity set; the six-month RV contract at $3,600, or $600 monthly, sits between Bentsen Grove's $2,400 and Seven Oaks' $3,137 to $3,479 and below Tropic Star's $3,750, which is the correct position for 1970s pads with city utilities and a strong activities program. Summer monthly RV sites are carried at $380 and transient nightly sites at $45. Rents escalate 2.5 percent per year, below the Valley's recent pace, and other income, which comprises laundry, storage, propane and late fees, is carried at 3 percent of lot revenue.

The stay-length ledger follows from the rate card. Six-month contracts, annual leases and monthly terms are stays over 30 days by definition; the transient nightly guest is the only revenue inside SBA's 30-day window, and at 6 to 7 percent of the RV sites across the year it is about 5 to 6 percent of total revenue. No rate card the Valley will support moves that share past 50 percent, because the product the market buys is the season.

The acquisition closes in the first quarter of 2027 with the park operating, and the model carries the resident base from day one.

Revenue from stays over 30 days is 91.7 percent in Year 1 and about 91 percent thereafter; the balance is transient nightly revenue and other income.

Location: 2300 E Business Highway 83, Weslaco, TX 78596 Lots: 389

Source: Marshall & Swift CoreLogic, MMCG

Total project cost of $21,594 per lot is a going-concern price for a stabilized community, not a development cost, and the deferred maintenance line of $250,000 is an MMCG allowance for a 1970s park whose pads, pedestals and clubhouse have not been inspected; the property condition assessment is a condition. No construction interest, guarantee fee or lease-up reserve is carried because the park is operating and the loan is conventional.

Loan Assumptions

For reference, the SBA 7(a) structure the buyer presented, a $7,560,000 loan at 90 percent of cost, would have exceeded the program's $5,000,000 maximum before the eligibility question arose, and at prime plus 2.75 percent would have carried annual debt service of about $792,600 against Year 1 cash flow of $832,630, or 1.05x. The eligibility finding is the determination, but the arithmetic would have failed the lender's own test as well.

The park is not an eligible business under SOP 50 10 8. The transient test requires that more than 50 percent of the business's revenue for the prior year be derived from transients who stay for 30 days or less at a time; the park's revenue is about 5.4 percent transient on the study's model, and the operator's published product of monthly, six-month and annual leases on 55-plus lots confirms the structure. Separately, mobile home parks are ineligible, and 301 of the park's 389 lots are manufactured home and park model spaces leased to resident-owned units, which is a mobile home park by any reading; an ineligible business cannot obtain an SBA loan for any purpose. No carve-out cures the finding: the 88 RV sites cannot be financed separately as an SBA-eligible park because they are not a separate business, and their own revenue is itself about 70 percent six-month and monthly.

The state tenancy framework does not help and is beside the point. Texas sets no statewide stay cap, and a six-month RV guest may well be a licensee under the park's agreement and Attorney General Opinion KP-0222; but SBA counts stays, not legal status, and a six-month stay is not a stay of 30 days or less however the agreement names it.

The Year 1 operating budget at the occupancies above is built by line for a 389-lot, 55-plus community under third-party management in Hidalgo County.

The expense ratio of 46.5 percent sits between the 54 to 56 percent MMCG carries for a stabilized RV park and the 35 to 40 percent typical of a manufactured housing community, which is where a park with 77 percent manufactured home and park model lots and submetered utilities belongs. The replacement reserve is carried at Newmark's $75 per pad. Insurance is the line the Valley's lenders watch, and the sensitivity table carries it at double the budget.

The park covers from the first year because it is a stabilized community, and coverage builds with rent and occupancy against expenses growing at 3 percent. The Year 1 yield on total project cost of 10.3 percent is the return a Class C community earns at a 10.9 percent going-in capitalization rate.

At Year 1 rents, the park's fixed operating cost is $628,000 before the reserve and its variable cost is 7.5 percent of revenue for management, marketing and processing. Occupancy is stated as blended economic occupancy against gross potential rent at the rate card.

The 1.25x threshold sits eleven points under the forecast, and the park would have to lose a quarter of its economic occupancy before coverage fell to 1.0x.

The park holds coverage above 1.25x in every single-factor case and above 1.0x in the combined case. The last row records the structure the buyer presented: ineligible on two grounds, over the program maximum, and marginal on coverage even if it were not.

The determination of not eligible for SBA and feasible under conventional financing is subject to the following conditions precedent on the conventional structure:

The following items could not be verified from a primary source at the study date and are disclosed: the park's trailing financial statements, rent roll and reservation data; the operator's seasonal, monthly and annual rate card from its own website, in place of which the study carries rents set inside the published range of the five competing resorts quoted above; the current listing status and asking price as of October 2, 2026; the Hidalgo County combined tax rate and the appraisal district's assessment; the Vintage 2025 population estimates and American Community Survey figures for Weslaco and Hidalgo County; the Valley's total resort inventory, carried from industry counts; Victoria Palms' posted rates; and the City of Weslaco's zoning for the parcel.

This model study applies the methodology described on MMCG's RV park feasibility study and SBA RV park feasibility study pages. MMCG prepares RV park and campground feasibility studies for SBA 7(a) and 504, USDA Business and Industry and REAP, and conventional lenders nationwide, with engagements from $4,900 and delivery in 9 to 16 business days.