Question Authority with Links Magazine - Tommy ElsberryMarch 25, 2015
Tommy Elsberry, President of Frederica Realty, was recently featured in Links Magazine for his thoughts on the real estate market as pertaining to golf clubs and communities. View the full version of the Links Magazine by clicking on the external link, or check out the images for Tommy's insights. Full article text is shared below, courtesy of Links Magazine:
Golf clubs and communities have spent the last few years reacting to the effects of the recent recession. Survivors of the economic tumult have rebuilt and redefined themselves by upgrading facilities, adding new amenities, and adopting smarter business practices.
But it isn’t only the properties that have had to adapt to new realities. Today’s buyer has to be extra savvy—and skeptical. "Many players are trying to get back into the business," notes Steve Adelson, a partner in Discovery Land, developer of 17 high-end residential private clubs. "History can repeat itself if buyers aren’t careful."
Being a careful buyer starts with asking the right questions. We polled the LINKS Magazine panel—general managers, sales people, and others with decades of experience in golf real estate—for their suggestions on what consumers should be asking today when considering buying in a golf community. "The most important questions are also the most obvious," says Chip Misch, COO and general manager of The Loxahatchee Club in Jupiter, Fla. "Start with the overall financial health of the club and community: Any club should gladly provide audited statements. Also ask the average age of the membership, what sets the club apart in its competitive market, where do the members come from, and what projects and assessments are on the horizon." Check for negative indicators, too. Ask about delinquencies, that is, the number of club members and/or home owners currently not paying dues and other fees, as that money probably has to be made up by other members. Similarly, real estate inventory can offer insight into a community’s financial standing: While a big supply of available homes might get you a good deal, it also could point to longer-term problems with the property’s stability. After thoroughly vetting the financials, get personal. "Questions should be about the facility, amenities, family orientation, and the responsiveness of management to the market," says Jeff Heilbrun, COO and general manager of Snake River Sporting Club in Jackson, Wyo . "Look for more progressive thinking on issues that matter to you: cell phones and dogs on the course, even wearing jeans if that’s important. As a buyer, know your own lifestyle and be sure the community is a good fit."
A few panel members advise asking about the availability of tee times and the number and variety of dining options, formal and casual.
"New members want to know what there is to do other than golf," says John Jorritsma, director of sales and marketing at Ibis Golf and Country Club in West Palm Beach, Fla. "As to the golf, ask about reciprocity with other clubs, and the availability of intra-club leagues and ladies’ leagues. Given the interest in fitness, is there certiﬁ ed golf-speciﬁc personal training or physical therapy on-site? Same with club-fitting studios and swing-analysis technology. And if you’re new at golf, what sorts of programs exist for the beginner?"
While the panel admitted that today’s questions aren’t much different from what buyers should have been asking in the past, there are some notable uposted_dates, speciﬁcally when evaluating a club/community as an investment. One lesson the public learned from the recession is that the value of real estate doesn’t only go in one direction.
"The market does not view real estate as an investment with a great expectation of appreciation," cautions Tommy Elsberry, president of Frederica Realty on St. Simons Island, Ga. "Rather, people are rightfully cautious and want to avoid future risk of loss of value by investing in well-conceived, professionally managed communities with a variety of social opportunities in addition to the traditional amenities. The public is seeking solid ownership with a clearly deﬁned vision for future housing products and amenities,recent sales success, and a healthy pace of new home construction."
Rule one remains "buyer beware." As for rule two, our panel suggests, "buyer be smart": Do your homework and ask questions—lots of them.