Marina Lakes Golf Course

Location: Delray Beach, FL

Description:

Located in Delray Beach, FL, Marina Lakes Golf Course offers golfers of every skill level an opportunity to practice, improve, and play the game they love. It is an 18-hole championship caliber golf course with an all grass driving range that is lighted at night. There is also a full service pro shop that offers great deals on all kinds of golfing apparel and necessities. For those who are just beginning or wanting to step up their game, there are private practice facilities available with professional golf instructors. Included on the property is a restaurant and tennis courts. All of this is currently being sold for $1.5 million.

Attached is a model spreadsheet that includes a pro forma income statement and balance sheet forecasting 11 years of operation. We chose the inputs and made assumptions according to our research of the golfing industry and the market in Florida. In our analysis, we used a weighted average cost of capital of 7.24%. Our findings show that the internal rate of return and the weighted average cost of capital are equal at 7.24% if we were to purchase the assets for $1.53 million, which is more than the current asking price. These numbers are based on an initial 56% debt and 44% equity ratio, with the debt steadily going down over time. This is a good price for the golf course based on our research.

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