golfmak 2010

 

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kahn 12 2010

ABOUT MIKE KAHN

KAHN'S GOLF BUSINESS BLOG

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Fixer-Uppers Could be Good Now

The Growing Private Club Dilemma!

MARKETING: Cheap prices as a means to compete is not always the answer

2008-9: Is this the Best Time Ever to Buy a Golf Course?

golf ball

It was the Ball! What I think you should know.

What Not to Do as a First-Time Golf Course Buyer

The Future of the Golf Business as I see it.

Golf Course Buyer's Guide

Financing a golf course

Finance to Buy, or Refinance a Golf

Course. Start the Process Here

You'll think I'm NUTS saying we need 1,000 more golf courses - until you read this

A Golf Course Buyers Formula

Getting a Golf Course Loan.

Avoid Mistakes that Scare Lenders Away!

Golf Business Experience. Mike Kahn's 50-Years.

Marketing a Golf Course: Simple Rules

Golf Business Consultation. Your first one is Free.

Golf Business Consulting. What Will it Cost?

The Truth About the Golf Business Today.

The Golf Course Superintendent? Do You Need One?

Golf Course Feasibility. Have You Updated Yours?

Buying Default Golf Courses Can be Lucrative for Tax Purposes

Golf Participation Statistics

A Golf Expert's Advice to Bankers

Golf Investors FAQ Sheet

Golf Course Financing. Where to look.

New Golf Courses. Your Players!

Golf Course Analysis

How to Create a French Drain

Golf Business FAQ Sheet

Golf Participation Statistic

Do you need a Superintendent?

Golf Operators. Watch Your DSR

How Banks Run Golf Courses. Have a look...

Tough Times for the Golf Business?

Golf Course Operator's Axioms

Golf's REITS and Trusts Distorting Factors

The Financial Downfall of Many Golf Courses -The "Big-Foot" Clubhouse?

The truth about the golf business.

Planning a Career in Golf?

Enjoy this editorial. "It was the Golf Ball!"

Kahn's Golf Biz Axioms

About Your Free Golf Business Consultation

Great Golf Web Site!

Members. Keep them Happy and Spending

Message to Bankers

Golf Course Management Companies: An Opinion 

Best information: The National Golf Foundation

About a Golf Course Analysis

GOLFMAK, INC.

Email: mike@golfmak.com

Phone: 941.739.3990

Fax: 425.675.6909

BRADENTON, FL

Michael A Kahn, Golf Business Consultant. From Grass to Finance. Over 50-Years at Your Service. Email: mike@golfmak.com

LET'S START GROWING THE GAME AGAIN - Like we did 50-years ago!

The REITS and Trusts - Golf's Distorting Factors

COMPANIES, REITS, TRUSTS HUNGRY FOR GOLF COURSES - SCREWING UP THIS INDUSTRY!

UPDATE 2002! GOLF TRUST WAS A COMPANY WITH THE BUSINESS PLAN TO BUY GOLF COURSES AND LEASE THEM BACK TO THE SELLERS.

They paid ridiculous prices and apparently made endless bad deals.

They crashed like the Hindenburg. Gee! Who could have predicted that?

Whatís worse, they caused major distortions in the industry. How many golf courses saw their property taxes soar based Golf Trustís reckless business plan?

Financial groups are distorting the golf course business by paying unrealistic prices for golf courses. (You likely read about Golf Trust in Crittenden Reports)

One company recently paid over $7 million for a $5 million dollar Southeast U.S. golf course.

Another Golf Company recently paid a reported $36 million (Oops! Turns out it was closer to $45 million!) for a group of Southeast US golf courses that some say (I say) were worth less than $25 million. The group assumed that by raising prices across the board they would easily cover their enormous debt. Instead, price raises simply sent rounds elsewhere, and revenue immediately dropped (Gee! Who's surprised?). The company's upper management attached blame to local management for failing revenues - and fired them!

 

HOW, WHERE DO THEY GET THEIR MONEY?

Just because these people can break 80, they parade as golf course experts and schmooze others to invest money into the golf business. Many groups go directly to Wall Street looking for investment. Glossy Business plans and a little 'name dropping' is enough to tickle the emotions of 'near-golfers' to get at their venture capital (athletes are prime targets).

NO RISK - MEANS DISTORTIONS

Many riskless golf 'Golf Company Experts' have little or no fear of failure, because they're using other people's money. Company CEO's line their pockets with management fees, points, commissions. etc., adding as much as 10% to the cost of a golf course acquisition. Once a course is acquired, they drain the property's cash flow with outrageous executive salaries, bonuses, and 'head office' expenses. Operating without personal consequence (no vested interest), no-risk operators pay distorted prices for golf courses. But they're not just paying high prices, they burden the courses with unrealistic overhead and debt. Today, many 'company' acquisitions are so over leveraged they can barely withstand one rainy weekend!

DISTORTING INFLUENCES

So, here's what happens. Golf Companies get all this money from Wall Street. Then they charge into the world to spend the money as they promised to buy golf courses. However, they soon learn that they can't find courses that meet their acquisition criteria (all laid out in their glossy business plan). So, the basic limits of their business plans are compromised just to make deals for golf courses. To dispose of the $millions they promised to spend, they make ludicrous offers for anything available. Meanwhile, golf course sellers know these buyers are desperate for properties and hold out for distorted prices!

(I reviewed a golf course in Georgia. The owner, a major player in the 'company' golf world, was desperate to dispose of his interest in the property. What a dump! It was probably the worst golf course I've ever seen. I my opinion, it had a negative value. The man purchased the course because he had to get rid of money to own a golf course. Hats off to whomever sold it to him!)

The scenario above is exactly what distorts golf course values.

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EXPERIENCE (going back to 1956)

I have successfully managed: Private, Semi-Private, Public, Par-3, Executive Courses, and Lighted Practice Ranges.

Former Licensed Superintendent for Weedicides, Herbicides, Aquatic Weedicides, and Acquatic Herbicides

Finance Consultant: Placed over $100 million in golf course financing.

Former PGA Assistant Pro includiing the art of old-time backshop club repair (old fashioned methods),

Teaching professional Private and Group teaching for over 30-years

Former Golf Course Owner

Off-course retail store chain owner

Golf Course Broker - Over $100 millin in golf courses sold

Web site planning and publishing

Golf Course Turnaround Specialist

Clubhouse Design and Planning Consultant

Golf Course Buyer's Diligence Specialist

Golf Business Consultant

REVIEWED HUNDREDS OF GOLF COURSES

Ontario

Montana

Conecticutt

New York

Michigan

Ohio

Illinois

North Carolina

South Carolina

Georgia

Florida

Alabama

Louisiana

Texas

Caloifornia

Colorado

Kentucky

Tennessee

Minnesota

Isle of Wight (UK)

A PIONEER

Solid Range Balls

Tri-Plex Greens Mowers

Hydraulic Drive Reels

Cavity Back Golf Clubs

Private Brand Golf Clubs

Internet Tee Times Sales

Flymo (floating rotary mower)

Graphite Shafts

Indoor Golf Schools

Female Greens Employees

Non-Chemical Release Golf Course Fertilizers

Floodlit Night Golf

Video Tape Golf Teaching

Tee-Time Re-Selling

Golf Course Web Sites

100% Wall-to-wall bentgrass fairways

Using 3-wheel Motor Bikes as Work and Personnel Carriers (now trap rake vehicles)

Copywriting and Marketing Golf Courses on Radio, TV, Newspaper, and Billboards

Financial Statements for a Golf Course on Computer (Lotus 123)

Point-of-Sale Systems for Golf Courses