By Peter Finch
Sometimes it seems Donald Trump is the only guy buying golf courses. In fact, there are other buyers -- and quite a few of them are newbies to the golf business, according to Las Vegas-based golf course broker Keith Cubba.
Cubba runs the Golf Course Advisory Group at Colliers International, a collection of specialists who have brokered 16 transactions in the past 13 months.
Ten of the buyers were first-timers. "I just saw a news item about how there are 9 million millionaires in the U.S.," Cubba says. "Lots of them are golfers. For some of these guys, instead of buying a second or third home, a golf course is in their price range."
I'm reminded of a joke about the movie business. "Know how to make a small fortune in motion pictures? Start with a big fortune."
Cubba doesn't dispute that operating a golf course is a big challenge. It's probably not a good idea if you a) have no business experience and b) are not at all familiar with golf course operations, he says. But Cubba argues that "clever, creative buyers" are finding success.
As an example, he cites Heritage Golf Links outside Atlanta, a course that lost $75,000 in 2012. Its new ownership says it doubled tournament sales in 2013, started a tiered pricing system during busy periods, boosted its conditioning budget, and ended the year with a $435,000 profit.
Success as an owner "depends on what your expectations are," Cubba adds. "Is a 10 percent return adequate? Maybe you're buying it as a five-year hold. Or maybe you're doing this get your son a job as general manager."