Operating a Local Par 3

[Indy-Archer]

Man, $2.4 Million seems crazy high to me. Even if you could get an average of $20/rd and had absolutely no overhead for maintenance, salaries, etc., it would take 120,000 rounds until you broke EVEN. If you averaged 60 rounds/day, 365 days/year, it would still take you over 5 years to even reach that #. Again, that's with absolutely no other overhead. Assuming that you could even clear 50% of your income as profit, you're looking @ 240,000 rounds at that price. Now I don't know what it costs to play a round on a 9 hole course out there, but here in the non-peak times I can walk several nice 18 hole courses for about $20. 

I'm guessing the high cost is due to the location being in an area zoned commercial. 

I'm all about seeing people pursue their passions in life, but this just seems like a losing proposition to me. 

Best wishes as you work this out, though. 

Edited March 27, 2019 by Indy-Archer

[Buckeyebowman]

On 3/27/2019 at 1:19 PM, Indy-Archer said:

Man, $2.4 Million seems crazy high to me. Even if you could get an average of $20/rd and had absolutely no overhead for maintenance, salaries, etc., it would take 120,000 rounds until you broke EVEN. If you averaged 60 rounds/day, 365 days/year, it would still take you over 5 years to even reach that #. Again, that's with absolutely no other overhead. Assuming that you could even clear 50% of your income as profit, you're looking @ 240,000 rounds at that price. Now I don't know what it costs to play a round on a 9 hole course out there, but here in the non-peak times I can walk several nice 18 hole courses for about $20. 

I'm guessing the high cost is due to the location being in an area zoned commercial. 

I'm all about seeing people pursue their passions in life, but this just seems like a losing proposition to me. 

Best wishes as you work this out, though. 

Very good numbers analysis! And NO ONE clears 50% of income as profit! Well, maybe televangelists! But they have production costs too. So I doubt it! 

Edited April 2, 2019 by Buckeyebowman

[David in FL]

2 minutes ago, Buckeyebowman said:

Well, that's if you want to pay off the entire debt in one year! No one does turn around times based on one year! 

And it would be much more than “break even”,  because you would now own the $2.4 million asset without an offsetting mortgage.

[TheWoodBoss]

Just keep running it and make yourself some money. See how it goes, if you are not making money quickly it will always be an uphill battle. Sounds like this old guy is getting his money worth out of you. You run the place, restore it and open it and then buy it. He made his money and then let it go, it's only worth a fraction of the going rate just like anything else. Good Luck.

[RemyM]

For comparison, the 18 hole Hyland Golf Course in Southern Pines, NC just sold for $1,975,000.  Obviously a different part of the country but a full 18 holes with year round play.

[LMoore]

Besides seeming to be an exhorbitant price, banks have little to NO intrest in financing golf courses. It's basically $7k per month service debt per million for a commercial loan. If, and that's a big if, you found someone to finance $2M dollars, you would owe the bank $14K per month minimum.

Considering the winters you guys can have up north, no to mention rainouts, I don't see how in the world it would make sense.

If it's zoned commercial, anything other than commercial development would require zoning changes. It might be a beauracratic fight you would lose.

You sound like you have a good heart. Don't let sympathy and nostalgia cloud your senses. It has to be about business.

[mcanadiens]

I happened to see this article and it made me think of this thread.

'Call your lawyer': Seller angry at low price confronts Ohio golf course buyer at auction

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ALLIANCE — Tony Jaber bought himself a golf course — and the course-seller isn't too happy about it. Jaber posted the high bid of $495,000 for

 

[Lihu]

On 3/24/2019 at 8:28 PM, greatjay23 said:

Thanks for all the replies. That’s one reason I’m glad I’m operating it first so I can see what it is capable of. I will say this all the times I’ve been over there doing work to get it ready this year there is always a golfer or two stopping to ask if it is going to reopen and sometimes hit a few balls.

 

I do believe 2.4 is high for a Par 3. I know they are looking to sell it for the land rather than the business. They’ve had one or two offer before that’s actually been about asking price, since it is commercial property, but with zoning and ordinances each deal has fell through. I’d love to be able to buy it for less, but I know they are looking at commercial land value. 

 

I guess i’ll be fixing it up and reopening it and I’ll have to see what it brings in. I don’t know that it will bring in enough to justify that price though, because I just don’t know if that kind of money is there.

 

I’ll be redoing the greens this week and hopefully by the end of April I’ll be able to get it open.

Downtown Philadelphia would be great, outside York might not be worth the 2.4M.

What are the comps for land value?

[Bucki1968]

I know one thing for sure...banks are not touching golf courses here in Florida. Myself and a couple of investors are looking at possible buying a golf course in this area and none of them are going for more than 2M. As a matter of fact most are not even close. And these are 18 holes with year round play. We have checked out a couple and done the due diligence etc and it's gonna take a while to make $ back on investments. Some longer than others. We have been working on this for almost a year and I have a feeling that we may end up doing nothing. 

[chspeed]

9 minutes ago, Bucki1968 said:

I know one thing for sure...banks are not touching golf courses here in Florida. Myself and a couple of investors are looking at possible buying a golf course in this area and none of them are going for more than 2M. As a matter of fact most are not even close. And these are 18 holes with year round play. We have checked out a couple and done the due diligence etc and it's gonna take a while to make $ back on investments. Some longer than others. We have been working on this for almost a year and I have a feeling that we may end up doing nothing. 

Sometimes when nobody is touching it, that's the time to get in. The population in the US by 2030 baby boomers will all be 65+, and 1 in 5 US residents will be of retirement age. Whether that translates into more golf in FL is the big question.