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Track for sale

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I have been doing things like this for years and have been quite successful, albeit I have failed on more than a few occasions. I won't go into great details but my general stream of thought when looking at an investment is:

1. What are the assets worth now and with current zoning rules (consideration taken for possible future uses of property shall it be used in any other way than currently being used and if zoning can be changed).
2. Add cost of absolutely needed improvements to operate.
3. Add operational cash flow and consider how immediate you can see any returns (current, 6 months, 1 year, etc.)
4. Add all that up and choose a cap rate (reasonable rate of return on investment vs. the risk on the investment).
5. That cap rate determines the value of your investment on presumed positive cash flow expected.

With a track, I would expect a .15 cap rate. So, after asset calculations, fixed costs, variable costs, I would expect to earn 15% of my investment yearly. That is a very 30000 foot view of how I evaluate where to put my money.

They are asking 3.5M so after all is said and done and a ton of due diligence, I would expect a yearly cash flow of 15% of 3.5M minus value of assets. I would expect to make around 300K a year off of this unless land value is far more than I am assuming.

Now, that being said, if 3.5M was nothing to me, I would buy it and live there and setup a motocross track and turn it into my very own Disney Land for adrenaline junkies.
 
6,362
8,185
Some of my cronies back in the early 80s thought it would be cool to buy a few acres, build houses on it, with a test and tune facility. Along with garage spaces, at the time it would've been about $80K each..we could've actually done it..we should have.
 

Bill Pemberton

0ld Ford Automotive Racing Terror
8,425
8,354
Exp. Type
Time Attack
Exp. Level
20+ Years
Blair, Nebraska
Great analysis Antman, there are other benefits that could be explored there, but the track has never had any visionaries or highly committed owners , yet it has been open for 18 years.
 
1,246
1,243
In the V6L
If anyone is looking at buying this track, the question isn't really "What will it take to make it successful?". That's the obvious question, but it's not very helpful. What you really need to think about is "What does the local and regional market need for entertainment and recreation that this track facility can be part of to create a destination where enough people will spend enough money that it can thrive?"
 
.......but, as mentioned , I do know of a much better track opportunity.

Ok, ok, ok, I will double my money on on this other opportunity. If I am thinking of the right opportunity? At one time it was known to the public IF I am thinking of the track you are mentioning. IF I am it is a great opportunity, TONS of backing and supporters, and the up keep has been good and has a good reputation.
 

ChrisM

Mostly harmless.
1,180
1,419
Exp. Type
HPDE
Exp. Level
3-5 Years
South Carolina
This was more just an exercise in curiosity for me. If I was ever in a position to own a track (which I most likely never will be), I'd probably end up living on it or something. I am really just fascinated by stuff like this.
 

Grant 302

basic and well known psychic
This was more just an exercise in curiosity for me. If I was ever in a position to own a track (which I most likely never will be), I'd probably end up living on it or something. I am really just fascinated by stuff like this.

The best thing to do to get your feet wet with anything like this is to be an event promoter - for a track day or weekend. And after that's all done and your event was a success, imagine needing to do that for say 20-40+ weeks/events a year and at various levels of attendance, etc. - plus handling all the rentals etc. for people putting on their own events and just paying you to rent your facility.
 

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