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KAHN'S GOLF BUSINESS BLOG
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Could be Good Now
Growing Private Club Dilemma!
Cheap prices as a means to compete is not always the answer
Is this the Best Time Ever to Buy a Golf Course?
It was the Ball! What I think you should know.
Not to Do as a First-Time Golf Course Buyer
Future of the Golf Business as I see it.
Course Buyer's Guide
a golf course
to Buy, or Refinance a Golf
Start the Process Here
think I'm NUTS saying we need 1,000 more golf courses - until you read
Golf Course Buyers Formula
a Golf Course Loan.
Mistakes that Scare Lenders Away!
a Golf Course: Simple Rules
Business Consultation. Your first one is Free.
Business Consulting. What Will it Cost?
Truth About the Golf Business Today.
Golf Course Superintendent? Do You Need One?
Course Feasibility. Have You Updated Yours?
Default Golf Courses Can be Lucrative for Tax Purposes
Golf Expert's Advice to Bankers
Investors FAQ Sheet
Course Financing. Where to look.
Golf Courses. Your Players!
to Create a French Drain
Business FAQ Sheet
you need a Superintendent?
Operators. Watch Your DSR
Banks Run Golf Courses. Have a look...
Times for the Golf Business?
Course Operator's Axioms
REITS and Trusts Distorting Factors
Financial Downfall of Many Golf Courses -The "Big-Foot" Clubhouse?
truth about the golf business.
a Career in Golf?
this editorial. "It was the Golf Ball!"
Golf Biz Axioms
Your Free Golf Business Consultation
Golf Web Site!
Keep them Happy and Spending
Course Management Companies: An Opinion
information: The National Golf Foundation
a Golf Course Analysis
Michael A Kahn, Golf Business Consultant. From Grass to Finance. Over 50-Years at Your Service. Email: email@example.com
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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
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!
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
(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.
(going back to 1956)
have successfully managed: Private, Semi-Private, Public, Par-3, Executive
Courses, and Lighted Practice Ranges.
Licensed Superintendent for Weedicides, Herbicides, Aquatic Weedicides,
and Acquatic Herbicides
Consultant: Placed over $100 million in golf course financing.
PGA Assistant Pro includiing the art of old-time backshop club repair
(old fashioned methods),
professional Private and Group teaching for over 30-years
Golf Course Owner
retail store chain owner
Course Broker - Over $100 millin in golf courses sold
site planning and publishing
Course Turnaround Specialist
Design and Planning Consultant
Course Buyer's Diligence Specialist
HUNDREDS OF GOLF COURSES
of Wight (UK)
Back Golf Clubs
Brand Golf Clubs
Tee Times Sales
Flymo (floating rotary mower)
Release Golf Course Fertilizers
Tape Golf Teaching
Course Web Sites
Wall-to-wall bentgrass fairways
3-wheel Motor Bikes as Work and Personnel Carriers (now trap rake vehicles)
and Marketing Golf Courses on Radio, TV, Newspaper, and Billboards
Statements for a Golf Course on Computer (Lotus 123)
Systems for Golf Courses