Billboard for Sale: An Amazing Deal that Anybody Could Have
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By Frank Rolfe
Although I spent my career in the Dallas / Fort Worth, Texas market, I discovered one of the greatest billboard for sale deals in Los Angeles, California.
It all began with an ad we were running that said, “We Buy Billboards”. The caller was a guy who had inherited about twenty-four billboard units in Los Angeles when his brother was killed in a car wreck. This guy had no idea how to run an outdoor billboard business, so he stopped taking calls, paying ground rents, and let all the ads go empty. He saw my ad and was intrigued.
He threw out a price and I accepted it at full price because it sounded low. The important part to me was what he agreed to. He allowed me a six month due diligence period to try and re-paper the ground leases.
When I flew out to Los Angeles, I found that the locations were pretty decent with three of them standouts. The risk management part of my brain went to full speed; I quickly decided to try and sell these three standout locations to a big outdoor billboard company to reduce my investment in the remaining signs. So, I packed up these three signs (after re-negotiating their ground leases) and met with the biggest sign companies in Los Angeles. My hunch was a good one, because the biggest company offered me as much for the three signs as I was paying for the whole operation: $250,000.
What made this an amazingly great deal was the fact that I didn’t have to put one cent into buying these signs. I did a simultaneous closing of the three signs and the entire operation. In one day, I had gone from no signs in California, to a major player in Los Angeles. The best part is that I had not risked one penny.
I found that operating billboards in Los Angeles was extremely difficult. After a few years, I sold the operation off for a $300,000 profit. That amount was not very impressive, except for the fact that I had not put one dollar in the deal.
You’re probably asking why didn’t the big local companies contact the guy directly to buy the signs before he ever called me? After closing, I asked them. They told me they only wanted the three signs that were standouts. They guy would not offer three billboards for sale by themselves. So why didn’t they just buy the whole group and sell off all but the three signs? Chalk that up to the amazing dynamics of big companies (and an opportunity for you and me).
The lessons I learned here were as follows:
- Thinking outside the box is very profitable.
- Buying a group of assets and selling a few off to pay down debt is a great strategy.
- Big outdoor billboard companies can make stupid decisions.
About Frank Rolfe
Frank Rolfe became the one of the largest private billboard operators in the Dallas/Fort Worth area. He eventually sold his billboard empire to a public company 14 years later. Rolfe is sharing his expertise to anyone interested in getting involved with outdoor billboards. He is the author of the book, “Big Bucks from Big Signs”, which contains everything you need to know in order to get started.
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