Buying a Closed Course

24

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  • 2bGood2bGood Members Posts: 5,224 ✭✭✭✭✭✭✭
    edited Jul 30, 2019 12:46pm #32

    Good for you. Not sure I would be investing a golf course right now unless I knew it had land value that could be developed for other uses. They do however say that the first person to own a golf course loses money, but the the third guy has a chance.

    You will have no clubhouse for a long time, and given the yardage you could focus on golf for real golfer. You have the yardage to do it.

    Post edited by 2bGood on
  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭

    @larrybud said:

    @smashdn said:

    @larrybud said:
    Why did it close in the first place?

    I don't know for sure. My guess is that they were attempting to operate it initially as a country club in a small town that had two. I do not know which one came first. I suspect however due to the location between two much larger towns that have few public golf options that a public course with a good practice facility would go over well.

    I mean, it sounds like you have even done the most basic research into this.

    The course is three hours away from my home and the possibility came up the day that I made the initial post. I haven't exactly had the time or opportunity to go digging just yet.

  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭
    edited Jul 29, 2019 3:40pm #34

    So one question I have in my mind that I just can't see to repress or find an answer online, to whom do you go to first to identify the action items on the list? Do you hire a super to walk with you over the property and address what needs to be done? Or do you hire a design/renovation firm to come take a look at what changes may need to be made?

    I would hate to fix the irrigation and bunkers and greens as it sits only to need to go back and re-route or shift holes here and there to decrease bottlenecks, waiting and increase the natural flow or take out safety issues inherent with the existing routing/design. There is an absolute cluster bomb of a cart path mess. There is also two pieces of the property that aren't being used that might could take a hole to fix the flow somewhat. Seven could be pushed out to the left to add interest by adding a slight dogleg right to an otherwise straight hole. Might also ease some of the congestion up against fourteen.

  • dmac4gdmac4g Members Posts: 1,295 ✭✭✭✭✭✭

    Hire a consultant that you trust. A Superintendent would be a good start. Find one that you trust and throw some money at him to walk the property and give you his thoughts. He will probably be able to point you to other experts you may need as well.
    Before I did any of that though, you need to find out the reason "why" it closed. There is a reason why someone took a revenue generating asset and shut the door. If it was cheaper to walk away than it was to keep it open; what do you hope to do to change that?

  • NDSwimNDSwim Members Posts: 111 ✭✭✭

    You are putting the cart well before the horse......to your original post.
    1. Investors first and foremost. There is no way I can do this by myself. 2. Where am I going to get the money?

    • Even if a good investment, do you have the network to bring in the money now and for years to come? Why a golf course versus other businesses in your town/city? While money is cheap, would you qualify for loans? Without money everything else is a waste of time.
      3.I love golf. To the point I took some golf management classes in college. It is not what I do but I understand the basics of what is going on and I have a fair understanding of agronomy and economy. My wife has a business management degree. She ran a multi-million dollar retail business for about 15 years. I think the business side we could handle.

    • Is this something to do in retirement? Are you and your wife still working? You are three hours away, are you going to move? Absentee owner? If such a slam dunk, why haven't others in the town purchased and returned to former glory?

    Wish you the best of luck as I will certainly be watching the thread.

  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭

    I would relocate. In fact I would relocate first for other reasons then potentially look to re-open the course. That first domino needs to fall before the golf course domino does.

    Why am I not seeking out investors now? For all the reasons others have mentioned. I don't know yet if it is even a viable business opportunity. To your, and other's points, I don't know why the course closed in the first place. I only have suspicions. Secondly, I don't know how much money it would take to get it turned around and have a revenue stream. Hard to ask for money if you don't know how much you will need. I don't even know if the owner is willing to sell at this point. I only have someone poking around for me to help me answer these questions. It is so early there are many more questions than answers.

    The intent of the OP was to make sure I was asking the right questions to make an informed decision and if my thinking was right if it were to come to fruition. I was hoping that someone here had ventured down this road before.

    As it turns out there may be a much closer opportunity that is not a turn around but more of a turn key golf course if I really want to scratch that itch.

  • DancinDancin Members Posts: 290 ✭✭✭✭

    @smashdn said:
    As it turns out there may be a much closer opportunity that is not a turn around but more of a turn key golf course if I really want to scratch that itch.

    At least with a currently operating course you could look at the books and verify where it stands. It'll also be a lot easier to get money if it is currently profitable and others can see that. Hang out around the course on the weekend and ask current players why they play there and anything they don't like. You'll still want someone to look at the irrigation system and facilities though. The irrigation system is a huge expense if that needs major work.

  • mallratmallrat Members Posts: 3,019 ✭✭✭✭✭✭✭

    It might be worth a call to Troon or OB Sports. Use a 3rd party management company that specializes in golf courses. Your employees would be employees of whichever company and you will use their benefits. You will also have access to their corporate discounts with regards to course equipment and chemicals.

  • NDSwimNDSwim Members Posts: 111 ✭✭✭

    I was never insinuating talking to people now, I was asking if you had the Rolodex of people who could
    potentially invest. You would probably start with friends and family so if you know they are struggling to pay their mortgage then they aren’t investing in a closed golf course.

    Good luck to you.

  • Hateto3PuttHateto3Putt Smoking Makes You Look Cool! Members Posts: 6,317 ✭✭✭✭✭✭✭

    If you really want to buy into a sports related business that will allow for a ton of golf.... Buy a bowling alley.

    I kid you not.

    Compare.... Busy times are league weeknights, far fewer expenses, (oiling/maintaining 20+ lanes vs cutting/treating 18 holes), don't even consider comparing property taxes, fuel costs, weather... Add the snack bar, game room, weekend kid parties, and beer revenue to the mix and properly managed, it can be quite the cash cow. All with 8-12 (mostly) part time employees.

    I know two bowling alley owners, they play golf more than just about anybody else I know. Guess where I met them?

    I also know a two guys who had inherited golf courses, I've never seen either one hit a golf ball, and both courses are now gone...

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  • BNGLBNGL Members Posts: 1,737 ✭✭✭✭✭✭

    I’m really quite perturbed at some of the comments about not being able to play golf if one invests or works on a golf course. I do fear that it truly will drive people considering a career in the golf industry away from something that has given me so much. Please do understand I am speaking from my own personal experiences only, but I have had the pleasure of knowing other sups that played at least once a week (May not have always been 18 holes but some here and there couple times a week is still acceptable and preferable to quell the itch). While I would agree that when your just starting out it may be difficult, because you can’t be **** around as the plebe, but that’s true in any industry, not just unique to golf. Once you have gotten your feet underneath you and balanced your work schedule it is eminently possible to play once a week, you just have to make the effort in my opinion. I stressed to assistants that you need to play to “see” the golf course and understand what we’re doing and how it’s affecting golfers. Conversely I would stress that proshop/golf ops play as well to understand what the members/customers are talking about so that they are informed and can address the needs upfront. So I guess to conclude the rant, there’s plenty of time to play golf if you work at a course in any capacity there really is, if there isn’t then I’ll say without hesitation that’s on them for poor time management.

    I’m only figuring playing once a week or so not everyday, that would be a little bit difficult but you can play several holes here and there and 9/18 round on weekends in the am or late evening etc no problem I’d reckon.

  • BNGLBNGL Members Posts: 1,737 ✭✭✭✭✭✭

    Side note, I didn’t know s c r e w ing around was a swear...

  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭

    This area of the country is not exactly a bowling area so that was never really an option. We hunt and fish in the fall and winter. Play golf, fish and chase kids around ball parks in spring and summer.

  • dcmidnightdcmidnight Marshals, BST Volunteer Mods Posts: 12,116 mod

    From what I've read in the last few minutes what you are talking about is going to cost millions of dollars. And you still havent mentioned where this is - so I'm guessing that is going to affect a lot of the answers.

    A nearby course attempted to come back from being overgrown and the new investors dumped millions into it. Only to find that there was a reason they went busto in the first place - not enough business to support it at the prices they could charge. Attempting to re-mow and re-open a course that has gone to seed is an incredibly difficult task.

    Honestly, it seems like there is a lot you dont know right now so it is going to be hard for people here - who also dont know - to give you honest answers.

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  • robdalkyrobdalky Members Posts: 181 ✭✭✭

    You need to review all of the old financial statements prior to even considering this. That’s the only way to know what went wrong and to start to get an idea of if it could be fixed. Find someone who knows a bit about business to have a look with you.

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  • BNGLBNGL Members Posts: 1,737 ✭✭✭✭✭✭

    http://www.golfbusiness.com/article.aspx?id=4208&bq=6yfv^g433$

    An aptly named and weirdly timed article on how courses are raising capital.

  • cardia10cardia10 Members Posts: 2,470 ✭✭✭✭✭✭

    One simple rule for buying or building a golf course that isn't in the top 50 in the country. If it doesn't come with adjacent land for housing development, prepare for an auction to sell the course again within 5 years.

  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭

    This one does actually.

  • JAMH03JAMH03 Members Posts: 968 ✭✭✭✭✭

    @smashdn OK let's get stuck in,

    Bottom line... you need the bottom line to make sense you can only cover it for so long.
    You have a vision and a hope and you need to fairly and fully vette those before taking on a losing proposition.

    First thing that comes to mind is read this book Not only will it speak to your heart but you'll be able to see some of the underpinnings of there project as it was initally put together. My peers are always talking about scalability the ideas used for BD have absolutely been utilized in many places all over the globe so we have reason to believe that some of them work and would apply to what you may try to do here.

    @smashdn said:

    So one question I have in my mind that I just can't see to repress or find an answer online, to whom do you go to first to identify the action items on the list? Do you hire a super to walk with you over the property and address what needs to be done? Or do you hire a design/renovation firm to come take a look at what changes may need to be made?

    I would hate to fix the irrigation and bunkers and greens as it sits only to need to go back and re-route or shift holes here and there to decrease bottlenecks, waiting and increase the natural flow or take out safety issues inherent with the existing routing/design. There is an absolute cluster bomb of a cart path mess. There is also two pieces of the property that aren't being used that might could take a hole to fix the flow somewhat. Seven could be pushed out to the left to add interest by adding a slight dogleg right to an otherwise straight hole. Might also ease some of the congestion up against fourteen.

    The map and numbering help. You're right that is a huge cluster all in that same area.


     



  • farmerfarmer Members Posts: 8,084 ✭✭✭✭✭✭✭

    Looking at the map, I wonder if this was originally a 9 hole course that had another 9 scabbed on? The front flows along, the back is just awful.

  • PepperturboPepperturbo Midwest and SouthwestMembers Posts: 15,839 ✭✭✭✭✭✭✭
    edited Aug 2, 2019 8:18pm #53

    You need to write a detailed business plan. Done correctly it not only has future plans and costs but also current operational costs and cash-flow needs for each aspect of the property, short and long-term investments, taxes, plus marketing, staffing and payroll costs, and a break down for how investors get a return on their investments, plus what you bring to the table aside and how much you get for being what sounds like the general partner. Most clubs run in red-ink and survive because the owner has serious wealth and income that needs tax benefits, or the red ink created by a CC or golf club. I know a few acquaintances that own multiple courses for that very reason. On its own, unless "you" have millions to invest, it's going to be near impossible to break even and or make enough profit to return profits to investors.

    FYI - Bunkers and sprinkling system can cost 800k-2M depending on course configuration and region. Also having water is good but having a million-dollar pumping station is key to effective use of that water. There is a huge list that makes up the P&L of CC. I was on the BOD of an equity CC., plus held leadership roles in various departments.

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  • mallratmallrat Members Posts: 3,019 ✭✭✭✭✭✭✭

    @Pepperturbo said:
    You need to write a detailed business plan. Done correctly it not only has future plans and costs but also current operational costs and cash-flow needs for each aspect of the property, short and long-term investments, taxes, plus marketing, staffing and payroll costs, and a break down for how investors get a return on their investments, plus what you bring to the table aside and how much you get for being what sounds like the general partner. Most clubs run in red-ink and survive because the owner has serious wealth and income that needs tax benefits, or the red ink created by a CC or golf club. I know a few acquaintances that own multiple courses for that very reason. On its own, unless "you" have millions to invest, it's going to be near impossible to break even and or make enough profit to return profits to investors.

    FYI - Bunkers and sprinkling system can cost 800k-2M depending on course configuration and region. Also having water is good but having a million-dollar pumping station is key to effective use of that water. There is a huge list that makes up the P&L of CC. I was on the BOD of an equity CC., plus held leadership roles in various departments.

    This post actually reminded/ made me rethink something. If this course does not have a well or water rights; WALK AWAY and fast. We are an 18 hole facility that basically doesn’t water the rough in the summer nor the long grass outside the rough and an average day for us is 800k gallons of water. We are lucky though because we have 2 ridiculously large wells and have access to 2 more.

  • farmerfarmer Members Posts: 8,084 ✭✭✭✭✭✭✭

    To Pepper's comments and Mallrat, after the length of time the course has been sitting, I doubt that the watering system still exists in a meaningful way.

  • PepperturboPepperturbo Midwest and SouthwestMembers Posts: 15,839 ✭✭✭✭✭✭✭
    edited Aug 5, 2019 5:28pm #56

    @farmer said:
    To Pepper's comments and Mallrat, after the length of time the course has been sitting, I doubt that the watering system still exists in a meaningful way.

    Given those systems are plastic, you are probably on to something.

    @Mallrat - Having wells are important except wells without an infrastructure pump system means water goes nowhere. Also, who you go to for answers should be written in your business plan. I, wouldn't invest without seeing one. Good luck.

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  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭

    Got to do a little sleuthing yesterday. Stopped in at the country club that is still operating to get their take on things. First thing that comes up is the clubhouse burnt. Ok, got that. I asked why they thought it didn't work out. They seemed to chalk that up to mis-management. < More to come on that. They said the conditions deteriorated as he wasn't "able to get the right guys out there that knew grass."

    I drove out and took a look at what is left of the course as far in as a dared since there are posted signs all around. The clubhouse is indeed burnt. It would be a complete demo. IMO not a bad idea anyway.

    I was lucky enough to talk with a guy that lived across the street. I pulled in and picked his brain a bit. His term was eye-sore. He stated that there was a plan for mini-golf (gag) and to keep the driving range operating. He also stated that the course had been there as long as he had lived in the area, close to 30 years. I feel like that is a glimmer of hope. It wasn't until the last ten years under the new owner's management that the course deteriorated. He thought that initially it was opened as a private club that struggled and went public and then went under.

    My take: The guy over-extended himself doing stupid stuff. Instead of taking care of his biggest asset, the course, he either inherited or built a clubhouse that was entirely too large and grandiose for the area. (Stop me if you've heard that one before.) Perhaps he was going down the road of a banquet hall/wedding rental type thing. He even went to the trouble of a croquet lawn. The only place I have ever seen a croquet lawn was Pinehurst. Keeping in mind our leisure activities around here are fishing, hunting, kids sports and golf, probably pretty close to that order, I doubt croquet was a great income generator and instead was just more turf to intensively manage.

    The course itself is not that far off from looking like a golf course. It is still recognizable as one to my eye. The neighbor told me the owner had some folks living in one of the equipment sheds in exchange for keeping stuff mowed out front. That will be exciting I bet.

    Attached are two bad pictures I took from my truck. I didn't get out given the posted signs and the fact that people carry guns around here and I was without one.


  • Hawkeye77Hawkeye77 Countdown to The Open Championship! IowaClubWRX Posts: 18,283 ClubWRX

    Honestly it doesn’t sound like you gained much real information at all. Seems like more of a lark, so I guess enjoy thinking about it.

  • smashdnsmashdn Let's cut them trees down. Members Posts: 1,347 ✭✭✭✭✭✭

    Real Estate guy is still poking around. Did hear that the owner has attempted to sell but he is asking a mint apparently. Until I speak to him there won't be much to be learned.

    I was in the area for other reasons so nothing lost really poking around.

  • dcmidnightdcmidnight Marshals, BST Volunteer Mods Posts: 12,116 mod
    edited Aug 6, 2019 2:10pm #60

    You already seem to have closed yourself off the the idea that golf courses need some of these side hussles to do what we like to call, make money. Mini golf. Weddings. Croquet. Whatever. Depending on the location - which you still wont say - public courses dont have the luxury of being so narrowly focussed as you seem to be interested in. Especially if they are in an area where they dont have a 10-12 month golf season.

    Footgolf around here is a good example. Local courses that may have been on the edge of closing took it on because - as most people realize - its better than being closed. More importantly, people who come for footgolf also eat your food and drink your beers.

    Anyway, best of luck.

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  • JeffreySpicoliJeffreySpicoli Members Posts: 1,957 ✭✭✭✭✭✭

    @smashdn said:
    Got to do a little sleuthing yesterday. Stopped in at the country club that is still operating to get their take on things. First thing that comes up is the clubhouse burnt. Ok, got that. I asked why they thought it didn't work out. They seemed to chalk that up to mis-management. < More to come on that. They said the conditions deteriorated as he wasn't "able to get the right guys out there that knew grass."

    I drove out and took a look at what is left of the course as far in as a dared since there are posted signs all around. The clubhouse is indeed burnt. It would be a complete demo. IMO not a bad idea anyway.

    I was lucky enough to talk with a guy that lived across the street. I pulled in and picked his brain a bit. His term was eye-sore. He stated that there was a plan for mini-golf (gag) and to keep the driving range operating. He also stated that the course had been there as long as he had lived in the area, close to 30 years. I feel like that is a glimmer of hope. It wasn't until the last ten years under the new owner's management that the course deteriorated. He thought that initially it was opened as a private club that struggled and went public and then went under.

    My take: The guy over-extended himself doing stupid stuff. Instead of taking care of his biggest asset, the course, he either inherited or built a clubhouse that was entirely too large and grandiose for the area. (Stop me if you've heard that one before.) Perhaps he was going down the road of a banquet hall/wedding rental type thing. He even went to the trouble of a croquet lawn. The only place I have ever seen a croquet lawn was Pinehurst. Keeping in mind our leisure activities around here are fishing, hunting, kids sports and golf, probably pretty close to that order, I doubt croquet was a great income generator and instead was just more turf to intensively manage.

    The course itself is not that far off from looking like a golf course. It is still recognizable as one to my eye. The neighbor told me the owner had some folks living in one of the equipment sheds in exchange for keeping stuff mowed out front. That will be exciting I bet.

    Attached are two bad pictures I took from my truck. I didn't get out given the posted signs and the fact that people carry guns around here and I was without one.


    You’re overestimating the stupidity of the previous owner. That’s a common—and deadly—mistake of business buyers.

    You’re far from having your head on straight concerning this opportunity.

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