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    12 Replies Latest reply on Sep 19, 2008 5:07 PM by DMIGUY

    Commercial financing for golf course purchase?

    gd4220 Newbie

      I have been looking at purchasing a golf course along with a business partner. The courses we are looking at are in the 2.5 to 5 million range. This has been something we have been discussing, but we are now moving forward with making this dream a reality. Collectively we are bringing about 1 million to the table. What are some of the options you would recommend on how we should proceed with financing the remainder?
        • Re: Commercial financing for golf course purchase?
          Fortis Wayfarer
          Hello gd4220,

          Hope all is well. Tell us a bit more about the course. Where is it located? Have you thought about an SBA for the other portion of the funding?
            • Re: Commercial financing for golf course purchase?
              gd4220 Newbie
              We have begun the inquiry process and are looking at several courses both in and out of the region (currently reside in northeast). We have not found the course we want yet as we are in the initial stages. We are primarily looking for a course that is profitable. We would consider one that isn't profitable if it were the right situation.

              I have not thought about SBA for other portion. Is that a difficult process to go through? Depending on purchase price, we will be putting down anywhere from 20-40%. I am assuming that will drastically improve our chances to obtain the additional financing that we need?
            • Re: Commercial financing for golf course purchase?
              golfheaven Adventurer
              Have you and your partner consider the future of golf and what people are looking for in the near future
              • Re: Commercial financing for golf course purchase?
                businessangle Newbie
                hi,

                If you could throw a little more light of the following things.

                1) Where are you guys planning to come up with the course?
                2) Other than 1 million the additional funds that you required would be debt or equity?
                3) If equity than what would you offer. depending on you investing 20%-40%?
                4) What would be the payback for the investor?

                If you have a business plan email itto me on business.angle@gmail.com
                  • Re: Commercial financing for golf course purchase?
                    gd4220 Newbie
                    1) Where are you guys planning to come up with the course?
                    I am not sure I totally understand what you are asking here. I think you may mean the geographical location of the course? If that is the case, we are focusing our search in the Northeast but are open to any location.

                    The additional funds that we require would be backed by the course itself (land, buildings, equipment, etc..). We would also be able to put up our home equity if need be. Our combined home equity is in the 600k range.

                    I believe that we would only pursue private investors if institutional financing is not available to us. Unless of course a private investor is willing to provide us cash at a lower rate than an institution would.

                    My intention with posting this thread was primarily to try and gain an understanding of what to expect as we work through the process of financing this purchase.
                  • Re: Commercial financing for golf course purchase?
                    DMIGUY Adventurer
                    I would offer this: Remember the Pizza Place syndrom. The immigrant who moves to a neighborhood, looks at a vacant store and says I'm gonna open up a pizza place. Mind you, that empty store has been the home of several pizza places before him and all have failed. But our undaunted immigrant has just fallen in love with the idea and cannot be swayed.

                    Given your budget, assuming you don't settle on an executive course, you will likely be looking at relatively smaller courses (in terms of total yardage) and less challenging courses (in terms of slope) since the two generally go hand in hand. In light of that, the course fees are notably less than other courses, but regrettably, course maintenance seems to cost the same as on the better courses.

                    A friend of mine did the same thing here in the Sunshine State, with a similar budget. Being avid golfers, he and his buddies could only see the fun in owning their own course. They were blinded by the thought of teeing off at their discretion. What a concept for a golfer.

                    Obviously, his saga ended up a disaster. The partners, their children and spouses ended up as staff and maintenance personnel in order to try and cut costs and keep the place in shape. When they weren't mowing the lawn, they were busy hosing the gatherings they sponsered in order to recruit and maintain members. It became a never ending battle ..... which they eventually lost.

                    OK, that's the downside. But I too dream of calling the starter and telling him to hold all starts for 30 minutes while my friends and I brazenly step onto the first tee as if we own the place .... oh yeah, we do!

                    Best of Luck
                      • Re: Commercial financing for golf course purchase?
                        gd4220 Newbie
                        The facilities that we have been looking at are all established and profitable. They are all putting money to the bottom line. Sounds like you would be very surprised at what is available in the price range we are looking at.

                        We would consider a facility that is not profitable IF it is the right opportunity.

                        I would never be blinded by the idea of teeing off at my own discretion. That attitude in my opinion sounds like a very big reason as to why your friend failed. My customers will come first each and every time. Our sole mission will be to create a fantastic experience for our customers. And the owners "holding the tee box" for 30 minutes goes a long way to creating the completely wrong image.

                        I don't anticipate playing very much golf at all for the first few years. And when I will play, I am sure it will be sneaking out for a very quick 9 holes at the very end of the day. I can already see myself hopping on a cart at 8pm, trying to get in 9 holes before the sun goes down...

                        We have no illusions of sleeping in every day until 10am, showing up at the course by noon, getting in 18 holes, having a bite to eat at the restaurant, and then going home. We will be there long hours. At times we will be cutting grass, raking bunkers, working as the starter, taking bags out of customers trunks, etc... We will work as hard as we can to create an incredibly memorable experience for our customers. Our goal is to create "raving fans". You Blanchard followers out there will know what I mean.
                      • Re: Commercial financing for golf course purchase?
                        fritzmaster Newbie

                        Hi, I think we can help you!

                         

                        Please call Fritz or Bob... or request an application via e-mail from fritz@bobnewinc.com

                         


                        Bob New Inc.
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