Thinking of buying a roller rink

One caution, do not putting your commitment to him in writing. Keep it verbal. Based on what you've described, I don't see how this could be anything less than a screaming great deal. You could convert that large of a building to a meeting space or venue, should the skating not be profitable.

tunes4046 said:

He want's it in writing that I continue to use it as it is has been at least until he dies he's 85, I could make updates and add more hours of operation but it has to be used for skating on Friday and Saturday nights until then, this an almost 20,000 square foot building

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So how long until he's 85? Still sounds like a good deal, even if you just hire someone to babysit the place for a few years.

How big is the skating floor? How many other roller rinks are there in a 35-mile radius?

$15,000 isn't much, but I probably wouldn't do it. Even without having to pay property taxes, your operating expenses are going to be high. Insurance on the place (including liability insurance) is costly, especially if you're doing public skate sessions. You simply can't promise to keep things as they are. Good deed or not, there's just no money in it. A business like that can't survive on two nights a week.

Other things to consider:
- Skating rinks generally do well in the wintertime, and are ghost towns in the summertime. You won't want to run the AC (if the building has it) in July and August when you're only getting 10 to 20 kids at each session.
- Maintaining the skate surface is not cheap. If it's a hardwood skate floor, you'll need to refinish it on an annual basis.
- You'll want someone who can keep your rental skates in good condition. Stoppers, wheels, bearings, etc... they wear out.
- If there's money to be made in the skate business, it's in lessons, concessions and redemption. Not admission.
- You can't have enough eyes in your rink. Your staff needs to be well-trained, with adult supervision (not just you) and every employee watching what goes on at every minute.

(I worked as a rink DJ for close to 10 years, and saw more from my DJ-booth corner of the rink than the owner could see in her office/ticket booth).

It does not sound like he wants to get out but merely wants to unload the operational headaches and responsibilities. He is trying to unload the work but keep the control. Not a mutually or equally beneficial relationship.

The condition that his personal/social desires supersede your business judgment and investment risks would be a deal killer for me. Unless the numbers are being seriously unreported, the ROI is too low.

I would hope that you would be better served, more profitable contracting and working your dj service on those prime nights every week as opposed to managing the subject rink.

If you only work 50 of the 104 Fridays/Saturdays and your net is only $200, extremely low for the sake of example, your annual profit would be $10k, twice the alleged rink's annual profit.

Without the land, the building may or may not have any value, only a legit appraisal should be relied upon for that valuation.

As far as the continued tax benefits as consideration, I would trust a government body's promises about as far as I could throw the subject building.

The reality is that the promises extended by a current tax board or city council are subject to drastic revision and dismantling by the very next version of the same board or council. Never forget that politicians are routinely allowed and re-elected despite their propensity to lie, deceive, and financially wallop those that foolishly rely on their reputability.

While we do have a smattering of Roller Rinks up here in the Great White north, it is our propensity to use paved roadways as makeshift hockey rinks that is world renowned. Of course with the advent of in-line skates it has taken off (only for those that aren't couch potato youngsters that are addicted to their cell phones and X-Boxes). I went to the following web site and learned that the great "US of A" has 4,304,715 km of paved roadways: The World Factbook
That makes for some tough competition for indoor arenas. My son actually played in an indoor roller rink league here in town for one season off season as he is a big ice hockey player (as am I still - just played last night). The reason he didn't go back and I didn't frequent the place is the rancid smell of B.O. in the place. I think up here we prefer to play road hockey in the fresh air vice a smelly indoor sweat rink.
For those in the know: Car! (see below)
View: https://www.youtube.com/watch?v=HpkecYVRt_E

View: https://www.youtube.com/watch?v=BWBBRczSPUk

tunes4046 said:

the city has committed to that part they have a few rules I have to follow regarding pricing, but nothing I can't deal with, the building is worth far more than he is asking, money is not an issue for the owner he is more interested in someone taking over that will keep doing what he has for the community

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Who owns the land?

be realistic,,,, think what else you could do with it? If you are a full time DJ (don't start anything here) would you be able to have an office there? Meet clients there? Have a space where you could show off your DJ service? Or maybe open the rink on the afternoons after school? Maybe a Mommie & Me gym class there during the day?

Maybe even try a Skating and Movie night on a Thursday? This outside the box to get more income.

tunes4046 said:

he's 85 now agreement is until he dies

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The others here make a pretty strong argument against this. Can't say that I disagree with their logic. Still, I have to wonder about the "in writing" portion. Does it specify remedy that he gets the property back if you don't comply? Is there not an out provision, in case you can't be profitable? Also, I just assumed that the lot would be part of the property. Are you saying that he's selling you the building without the property? Wouldn't that put him in the position of still owning everything and being able to start charging you rent on the land? I still wouldn't just write it off. Obviously, he's just tired of running it and wants to make you pay him to take over his operation, while guaranteeing he keeps control. If the deal can be modified to give you a margin of safety, $15k for a large building sounds like a steal. Not to mention, what's the chance of an 85 year old living terribly much longer?

tunes4046 said:

I would get the building and the 3 acres it sits on, he an honest old gentleman he wants someone to take care of the children of his community and care about them the way he has for the last 50 years, he never had any kids of his own, and his wife passed last year, I fully expect and hope that if I do this he will be there every Fri and Sat night as long as he is able, to watch the kids and enjoy his life. this is small town USA there are 2500 people in town, I am not considering this expecting to get rich, just to keep a decades old tradition and sense of community in place, the schools has about 400 hundred students total and the average attendance on a skate night is 150ish, there is a kitchen with stuff to make burgers fries and pizzas, if I purchase I will own everything the land the building and the contents except the arcade items and pool tables as they are from an outside vendor

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Then I think I'd sit down and take a hard look at what remedy is spelled out in the contract, should you make a course correction in the future. It may be as simple as just looking him in the eye and telling him, "I care about this as much as you do but having my hands tied legally simply makes this a bad business decision on my part." If you can convince him of your sincerity, then perhaps he'd be willing to strike it from the contract and let it stand as a gentlemen's agreement. Sincerity is the key, and once you can fake that you've got it made. I do think there are all kinds of possibilities to add mid-week functions to increase revenue. Not to mention, that is a LOT of hard assets you're getting for $15k. There was an old skating rink in my town that just got converted to business space. It's worth a small fortune now.

If it includes the land, the investment value increases monumentally assuming the land is appraised and meets the usage expectations.

Good Luck.

rickryan.com said:

I do think there are all kinds of possibilities to add mid-week functions to increase revenue.

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In a town of 2500? Good luck with that.

rickryan.com said:

There was an old skating rink in my town that just got converted to business space. It's worth a small fortune now.

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Here's a picture of a roller rink in Wisconsin... it's the building on the left. I'm not saying a place like this isn't worth $15,000, but it's not exactly in what I'd call a high-traffic area. If the business fails or you're suddenly forced to pay property taxes on the land, I think you'd have a hard time unloading a place like this (note: I have no idea if this is or isn't the place we're talking about).

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