Track for sale

Discussion in 'Road Racing Forum' started by 12coBoss, Feb 13, 2019 at 5:57 PM.

  1. 12coBoss

    12coBoss TMO Intermediate

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  2. ChrisM

    ChrisM No bad days.

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  3. VoodooBoss

    VoodooBoss Rick Moderator

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    Now if we all pitch in...
     
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  4. Grant 302

    Grant 302 OPM Spent: $587,402 Moderator

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    Is there somebody else willing to be the 49% stakeholder?

    Call Fred Pemberton. See what he says.
     
  5. ChrisM

    ChrisM No bad days.

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    For real though, what does it take to own and/or manage a track? Is this something you pitch to a bank for a loan and run like a small business? I don't have the finances for it now, but if I get a winning lottery ticket...
     
  6. Grant 302

    Grant 302 OPM Spent: $587,402 Moderator

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    That, or gather enough people with the money to buy it outright. Or just write the check. ;)

    That's more than I would want to sink into a business with relatively small and seasonal returns.
     
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  7. Bill Pemberton

    Bill Pemberton TMO Addict

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    This is one of the tracks close to me, and it appears to be listed under the name it is best known by, Mid America Motorplex. Currently the track is called Raceway Park of the Midlands and I do believe the schedule is fairly full this year -- I know we have a couple of NASA events there. Honestly , I believe the track could be purchased for less than that as there are improvements, resurfacing, and other other concerns that should be addressed --keep in mind it was built in 2001.

    If anyone actually has some interest of knows someone that might , have them call or email me. Having been lucky to run over 20 tracks in the past , I also know of another track that is currently for sale , though in a different manner --- looking for a partnership.

    MidAmerica Motorplex has a 2222 ft. straight, that parallels the 1/8th mile drags trip, so fun at times to go blowing by the Drag Racers as they roar down the strip. Could hit 150 mph in my Viper and surprisingly the times are similar to the ones run at Mid Ohio ----- of course if you screw up here you just fly off into the soybeans or alfalfa depending on what is planted, ha.
     
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  8. TymeSlayer

    TymeSlayer Tramps like us, Baby we were born to run...

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    3.5MM is just the start of an investment. I haven't a clue what the cost of maintaining, expanding the facilities, insurance, taxes, hiring people to run the place, etc... The location may also be a hindrance to profitability. Still, it does seem like it would be quite an adventure.

    I think Fred Pemberstone would be a great track owner!
     
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  9. Bill Pemberton

    Bill Pemberton TMO Addict

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    Key point , mentioned above , is I know the track could be purchases for less! It is only 15-20 minutes South of Omaha, directly off of Interstate 29, so decent access from Kansas City , Des Moines , etc. There are some areas that need upgraded , repaved ,etc. and those are primary reasons it will be purchased for less. But, since I know of another great track that an investor could get in for substantially less, and there are few changes needed, I would likely steer friends that direction.

    Besides , I checked my Bank Account and I only have .00035 million to invest in a race track.
     
    Last edited: Feb 14, 2019 at 6:07 AM
  10. 12coBoss

    12coBoss TMO Intermediate

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    I just did the math, Bill's throwing in $350, I'll match him. Who's next?
     
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  11. TymeSlayer

    TymeSlayer Tramps like us, Baby we were born to run...

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  12. ChrisM

    ChrisM No bad days.

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    I got about tree fiddy.
     
  13. Grant 302

    Grant 302 OPM Spent: $587,402 Moderator

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    How much less do you think Mr. Pemberstone?


    I think Tyme hit the major operating cost categories, for which you'll need the cash for immediately. So you'd want the loan for more than just the purchase price or have enough cash to cover it for a while. And remember, that the business plan would have to cover the interest on any loan amount to be viable.
     
  14. Bill Pemberton

    Bill Pemberton TMO Addict

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    My gut says in the 2-2.75 million range, and I know of another one that is a better deal, in my estimation.

    Some say the price they are asking is based on the fact that there seems to be interest in some industrial building near there , so the land may be worth more , but that speculation has not seen fruit yet.
     
  15. dabossinnne

    dabossinnne TMO Addict

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    This one's a hard sell at anything near the asking price, and even heavily discounted, no matter how you slice it.

    As an operating business/track complex (both road course and drag strip) you have to look at it through an operating business lens. It has to cash flow to cover the debt you'd have to buy the place, and there has to be an attractive enough ROI for the risk involved to make it worth the investment. I don't the know the operating numbers down there, but I bet it barely cash flows, if that. Rumor has it that Tincher, the previous owner, had to sink quite a bit of cash into it to keep it running. I don't see a great operating business model for that track as it currently sits (and as Bill says, it needs A LOT of upgrades and repairs), but maybe someone with a different/better vision and the right backing -- or a s*#tload of their own cash -- could possibly make a go of it. Still, hard to see how this would produce a good enough ROI at the end of the day.

    From a speculative land purchase perspective, well, it's just that. Who the heck knows? Maybe you'd be able to sell it at a profit w/in a few years, maybe not. In the meantime you'd still have a BIG loan to service which means you'd still have to derive some income from the property to at least cover the debt.

    The only other alternative is to return it to farm ground and cash rent it out. I'd guess the cost to tear up/demolish/remove all pavement and facilities and restore it to crop land would run into the many $100Ks. So, on top of the purchase price (which in this scenario you'd want to appropriately discount the "business value" in the purchase price, since you'd be shutting down the business) it would take quite a few years to see any kind of ROI in this scenario at current cash rent rates, and/or while you wait for a prospective industrial land buyer to come a-knocking.
     
    Last edited: Feb 15, 2019 at 10:50 AM
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  16. TymeSlayer

    TymeSlayer Tramps like us, Baby we were born to run...

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    Perhaps if you had the money you could leave the track there and build a golf course around it. Would make for an interesting day having two events planned the same day!
     
  17. ddozier

    ddozier TMO Beginner

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    A friend once told me you never want to build a track or be the Second, or even the Third owner. You want to let at least two others try and fail to get the costs in line with the potential revenue. You need to maximize every available dollar from the event participant and allow for a secondary income stream to have a chance at keeping it open. When those conditions are right and you have a chance to buy something at a significant discount you should still run away! Unless your goal is to make other people happy and not make money it is a tough business model that requires a very special owner and staff to make it viable.

    Small town tracks do not draw well, mega complexes have insane overhead, local support is usually dismal, economy and weather have a huge impact on bookings from season to season, insurance and taxes are ever present, liability is off the chart. You will likely need a sponsor that is looking for a write off and willing to support the business.

    Even having said all that I want to do it someday.

    Dave
     
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  18. Grant 302

    Grant 302 OPM Spent: $587,402 Moderator

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    Exactly. When you're so rich, you could consider the entire business a write off.

    A membership at Thermal might work otherwise.
     
  19. TymeSlayer

    TymeSlayer Tramps like us, Baby we were born to run...

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    You guys buy it, I'll drive it. It's like the ranger on on golf course who gets paid in free rounds. I'll do some corner work for some free laps.
     
  20. Bill Pemberton

    Bill Pemberton TMO Addict

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    I was on the track after the initial paving in a Craftsman Truck that Dick Trickle had driven. Guy asked me if I would like to drive it after hearing I was a decent driver and another guy told him I had driven stuff like his truck before. Well, when he asked if I had driven a truck before, I said sure , since he was referring to his racer and I was referring to my tow rig. Needless to say , I had a blast and Paul Brown was the guy who told him I had driven stuff like this before ---yes, that Paul Brown. The rest of the story is for another time, but the track has endured the years, a flood and other items , but I will jump in there and discount the rumors listed above about the previous owner ( not defending him, I think he was part of the problem, but the reason listed is incorrect). There are alot of common sense items listed and tracks are unique in how to make them profitable , but it has survived for 18 years, so that tells folks something. It is priced too high in my mind ,as I mentioned , but it needs updating primarily due to age and that is the main focus to the next owner to use in negotiating the price. Heck ,for many years they did lease out part of the track for soybeans and alfalfa , so they were using many of the tracks assets. The one statement that is definitely listed incorrectly is that this is a small town track ---- it is 20-40 minutes from the Omaha Metroplex, which is close to a million folks. Down the road less than 2 hours is Des Moines , Iowa , and the Kansas City area and suburbs are only 2-3 hours away. It has potential at a lower price point, but having been around the track since it's inception I have been pretty aware of it's downfalls and weaknesses. Current owners are making improvements slowly, but they are trying and for track rats it is nice to know the track is still there to play on --- NASA will be there twice, SCCA there once and there are other groups , including bike groups scheduled.

    I think we all realize tracks can be tough ventures , and though a comedy of errors MAM/RPM has survived through the recession and more. Whether it will continue into the future we will all have to wait and see?
     
    Last edited: Feb 15, 2019 at 3:44 PM

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