[Dan Moore]

Thank you all for the responses.  Not sure this will ever move beyond the thinking, talking stage but this certainly helps focus the thought process.

The course definitely has maintenance/restoration issues as 65 bunkers would need to be redone and the entire course regrassed.  I'd also assume the worst on equipment and the irrigation system as I wouldn't want the risk of a failed irrigation afterv regrassing.

I'm not sure how applicable the formulas are in that the property is underutilized though substantial investment would be needed to bring out the full potential. 

To what extent can undeveloped land of similar location and size be used to place a value on the property? 

A quick search of similarly sized vacant land in the area shows values ranging from $12,500 to $25,000 per acre and some in areas with nearby commercial development quite a bit more.  As I understand it 1/3 acre developed lots in the area are going for $80,000 but imagine the development market is quite weak at the moment.   

[Kevin_Reilly]

I'm not sure how applicable the formulas are in that the property is underutilized though substantial investment would be needed to bring out the full potential. 

The key is not to compensate (in the price of the project) the seller for the value you are going to bring to the project.  You're assuming the risk that the course won't hit its potential, so you need to be the one who captures the reward.  After all, the seller could make the investments himself, see the results and garner a higher price in a few years if the potential is realized.  But he is choosing to sell ahead of that, so that's his tradeoff.  Good luck.

[Mike Benham]

The key is not to compensate (in the price of the project) the seller for the value you are going to bring to the project.  You're assuming the risk that the course won't hit its potential, so you need to be the one who captures the reward. 

Spot on ... risk/reward much like a shorty drivable par-4 ...

[Forrest Richardson]

Dan — You should find a member of:

http://www.golfappraisers.org/

You can also seek assistance from the National Golf Foundation (NGF). NGF conducts very decent evaluations, including business pro formas for private clubs, municipalities and potential buyers. Our office occasionally gets involved with looking at clubs that are for sale. Feel free to contact me for any additional information.

[Dan Moore]

Understood on the formulas, but I think the market value may be greater for non-golf uses so you are almost forced to look at the potential of the course rather than formulas based on present revenue to see if the project will make sense. 

[Forrest Richardson]

I am not sure if your are responding to me, but an "exit strategy" for a golf course property is — unfortunately — nearly always at play in determining value. If the property does not have a deed restriction and can be used for another purpose then it is often the case that a different use can produce more potential revenue. However, nearly all golf courses have some degree of restrictive land use attached. And, in many cases, there are "perceived restrictions" — e.g.....

"We have always been told that the golf course will always be a golf course...my wife and I would never have bought the lot had we known it might be turned into condos..."

"I recall a condition back in 1954 that the developer would not get to build a two story clubhouse unless the golf course always remained open space..."

"Over my dead body will you take away the golf course...just try and I will have Matt Ward chase you crazy with a 7-iron..."

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