Acquisitions Anonymous - #1 for business buying, selling and operating - Are Pickleball Clubs the New Fad or the Next Fitness Empire?

Episode Date: November 11, 2025

In this episode, the Acquisitions Anonymous crew breaks down a freshly listed $1.9M indoor pickleball club in Houston, debating whether it’s a sports goldmine or a post‑trend trap.Business Listing – https://www.bizbuysell.com/business-opportunity/pickleball-club/2414949/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.💰 Sponsored by:Capital Pad – A platform connecting accredited investors with vetted small business acquisition deals. Discover exclusive opportunities at https://capitalpad.comAcquisition Lab – Your fast-track to business ownership. Get hands-on support, world-class resources, and join a top-tier community of acquisition entrepreneurs. Schedule your free consultation at https://www.acquisitionlab.com and mention Acquisitions Anonymous!The hosts dive into a just‑listed $1.9 million Houston indoor pickleball facility boasting $400K in cashflow and a prime 15‑year below‑market lease. With 51,000 square feet, 18 courts, and multiple recurring revenue streams—including memberships and court reservations—the business claims to be “profitable from day one.”Key Highlights:- $1.9M asking price with $400K reported cashflow — business established only in 2024- 15-year below-market lease for 51,000 sq ft facility with 18 courts- Multiple revenue streams: memberships, court rentals, open play, potential food & beverage- Moat discussion: location, community engagement, “first mover” indoor advantage- Risk analysis: is pickleball peaking or still rising? Is the growth sustainable or a fad?Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Welcome back, everybody, to another episode of Acquisitions Anonymous, the internet's number one podcast for small business M&A. We have an awesome deal today. We're joined by Travis with Capital Pad and we have all four co-host. And we talk about a pickleball complex in Houston that is pretty interesting. It's relatively new. It's only been in business for about a year, but has pretty meaningful margins. We talk about pickleball as a market. We learn the term pickleheads, which is.

is what I guess pickleball fans are called. But we talk about the dynamics of leasehold improvements, the real estate-centric nature of this business. If you're into pickleball, which how could you not? Are you living under a rock? Pickle balls all the rage. I think you'll enjoy this episode. Stick around after a quick word from our sponsors. Well, so, Acquisition Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line. Hey everyone, it's Bill, and I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod.

It's called CapitalPad, and it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs that is people who want to buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisition deals. meals. So if you want to back somebody buying a small business, CapitalPad is a place to do it. And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors. So the really great thing, too, from the investor side is that CapitalPad takes care of all of the details that can get hairy with small business acquisitions. They handle standardized terms, standardized governance, standardized distributions all up front in black and white. Basically, CapitalPad professionalizes investing in small businesses. And the returns can be really,

really good. I'm so stoked they exist. It's founded by my friend Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that's appealing to you, if you want to buy a small business and need capital, or if you want to invest in small businesses, go check out Capitalpad.com and tell them that Acquisitions Anonymous sent you. All right, we've got a fun episode of Actions and Eyes today. We have Travis Jameson from CapoPad with us, and we did a classic activist anonymous thing where we were talking pre-record, and Gerdley goes, quick, hit record, hit record, hit record.

Because Travis was just telling us that he got back from a really interesting conference. So what conference was it, Travis? Yeah, so it was the McGuire Woods Independent Sponsor Conference in Dallas. it is probably one of the most intense conferences I've ever been to, like in a very good way. So it's a very, it's a gated conference. So only independent sponsors, which if you don't know, it's like kind of the in between between like traditional private equity and searchers. So independent sponsors and capital providers can go. And the first entire day are back to back to back, 20 minute one-on-ones between a capital provider and an independent sponsor,

basically trying to like just make deals happen. So the independent sponsors, a lot of them have deals that they're looking to raise for right then or trying to make the relationship with different investors. And investors like myself, we were just looking to like meet anyone who has something really appealing to us along the way. It was amazing. There's a lot of money and a lot of interesting people in that, not even that room. It's like a whole hotel. It takes multiple rooms to make this thing happen. So is it like a matchmaking situation? Yes, but they don't match you up. When you, you you sign up, you get access to this fairly horrible software program that you can like download it and start doing all kinds of filtering, which again is very difficult in this program, but you essentially find people that are good match. So, you know, there are people doing 100 million, $200 million deals at this conference that like, you know, CapitalPad were not a good fit for that. We can't deploy enough capital. But so you can sort through it and find the people doing, you know, $10 to $30 million deals, you know, one to $5 million EBITA deals. kind of sync up with those and then you just do outreach. So they can outreach to you. You can outreach to

them and they have this, you have your entire calendar synced up and just like send an automated date and then match you up and you go. Sit down and just one on one with it. Have any of you all ever done the ACG deal crawls, the association for corporate growth? It's kind of like the PE investment banking industry group, but they do a deal crawl. It's kind of like that. Whereas like, you know, the private equity firms are going, you know, booth to booth and the investment bank are like, what do you like? You know, we have some of those. We have some of this, you know, and I think it can be really efficient just to meet a ton of people in a very short amount of time. Well, so the second day, they do have the first half of the day is like traditional conference

programming, stage type stuff. But for, I think most people when they go to conferences, the real gold happens outside of the conference. It's on the fringes, the discussions you have. And so I think McGuire would have figured out, like, let's just skip most of that stuff and go straight to the good. And I think it really worked. I think it really works. But it's, very exhausting. That's a, it's a lot of mental taxing. You can't just kind of chill in the back on your phone or your laptop, like you've actually got to engage a lot. But really good stuff. I met a ton of really interesting, talented people. Probably some deals will come out of it. Like several of the deals were really in our sweet spot. A lot of them were not, but that's how

it goes, you know, when you're trying to find one. It was great. Oh, I look forward to investing in some of the deals you found on top of that. Exactly what I like to hear. Thanks for the pitch. I like the easy pitch in there, Bill. Appreciate it. Yeah. Will you give us an update? date on CapitalPad. The last time I logged in, there was like a fascinating deal. I don't know if I'm supposed to say that much about it. Well, we do to some regulations, we can't go into specifics of live deals. We can talk about the platform and probably pass stuff. That's fine. Will you give us just kind of an update on how it's going? Like, deal flow, users. Like,

is it tracking the way that you thought it would? Yeah. It's actually doing really well. You know, with every, I guess startup you could say, things always take what three times as long or three times it's hard. And this is the case with CapitalPad as well. But we're really making a lot of moves. So the current deal, I think we're deploying at least 1.6, but probably up to 2 million in it, which is a fairly legitimate amount. We're really pleased with that. The deals that we're getting, I think I'm really, really pleased with the quality of them as well. Again, we're heavily, heavily curating these. So, you know, just maybe like 2% of the deals kind of make get through. But the ones that are, like, I'm really happy in them. I'm investing in them.

I think our user basis as well. And like, we're growing every single day. That's the cool thing, both with like searchers and sponsors and with investors, like every single day we get new people. So a lot of us come from word of mouth, which is a really good sign too. People hear it on the pod. People hear it everywhere. So it's been really, really happy with it. That's great. Yeah, I was psyched. We did, I can mention, I think, the one we did, which was a rehab center in, I forget where is it Ohio? Somewhere in the Midwest, I think it's Ohio. Somewhere in the Midwest.

Just the financial profile was really attractive. The sponsor was really experienced. You know, a very savvy guy, had done a lot of deals before. And just economics seemed great. So I was excited to invest in that one. Yeah. I think they unlocked like material even died within 30 days of closing. Literally, yeah.

That was a pretty special situation. That was great. And you didn't call me. I'm upset. No. You can, you too, Heather, can register for capital cat and invest in these deals. If it had been a circuit deal, we'd have to be accredited. Yeah, there was no SBA loan involved, I don't think.

Can I pitch you guys on this pickleball club? Oh, yes. All right. I originally had brought the TV production deal that I'd run across, but I pivoted when this just showed up in my email. So it showed up in my biz by sell exactly 3.3. 35 seconds ago. So it's hot off the presses. So it is a Houston pickleball club. They have a picture of, it looks like a pickle ball. Would that be technically accurate right there, Mills? Yeah. It looked like a tennis ball to me at first, but that shows you how much I know about pickleball. It is a pickleball on a pickleball court and nothing else. So it's very artistic. It's like the Museum of Modern Art listing for business. The asking price is one point.

$1.9 million. Cash flow is $400,000, and gross revenues, $1.1 million. They don't disclose rent or EBITDA, and it was established, Heather, I know this is sad, 2024. So it's been open for about a year. All right. So the listing appears to be an owner listing. Hello, they write. Thank you for your interest. Since this business is still in early stages, it will not qualify for SBA or other traditional financing options. This is a strong opportunity, but requires self-funding.

Also, owner financing options are available. If you'd like to proceed, I'll give you a mutual NDA. Please note that proof of available funds be required before sharing any financial details or further information about the business. The business is already flourishing, profitable from day one with an impeccable location, the best-designed court layout and the largest number of championship size indoor courts in Houston. The key highlights and features of this pickleball club is the largest indoor facility in Houston, engineered to professional standards. They have state-of-the-art LED lighting systems designed to eliminate glare and shadows,

ensuring the most comfortable play experience in the city. They have a 15-year gross lease with rent significantly below market, saving approximately 15,000 per month in savings compared to comparable facilities. The landlord also reimburses HVAC expenses, adding further value in protection to operating margins. It opened profitable from day one with multiple recurring revenue streams, including membership, court reservations, and open play programs. It is powered by a proprietary software system for tournaments, leagues, rankings, and future AI video analytics integration. And the club is already recognized as a name in the Houston Pickleball community with a strong brand identity, loyal membership base, and active local partnerships. The facility, business systems, and brands are built for replication and franchising. The platform and operational model makes scaling straightforward and high margin.

Fully climate control, professional grade services, robust play culture, excellent demographics, and location access. To prepare the NDA, please send your full name, address, and phone number. We will then email you the NDA for your signature. Once signed, kindly return it along with proof of funds so we can move forward. If this doesn't suit you, we can talk on the phone first, though information will be limited until the requirements are met. It's in Houston, Texas, leased through 2039, 51,000 square feet, has 18 employees, two or full-time, and 16 part-time, and the reason for selling is personal. They will share with buyers with showing evidence. Interesting.

I kind of like the seller knows the game a little bit. They're mentioning platform out of the gate. Yeah. Yeah, this is well written. To level set, do we know exactly what this business is? Bill, how do you read it? Yeah. So as I sit here, I have pickle elbow in my right elbow from overusing and playing pickleball. That's what tennis elbow is now called. I'm just coining that.

So, yes, I do play pickleball occasionally. I play in the park by our house. But there are a number of these facilities in Charlotte where I live. So not having been to this one, but the ones in Charlotte are opening up. They've got maybe six or eight indoor courts. They've got a bar, food. you pay by the hour to rent the court to play pickleball, and then, of course, you buy food and drinks. So it's like a gathering place. It's a night out, go with your friends,

have food, drink, and play pickleball. So it's fun. Very, very on trend right now. I mean, these are opening up kind of everywhere. All the hip areas of Charlotte are getting one, and I'm sure lots of other places, too. Nobody owns pickleball. It was started 50 years ago,

because I was thinking, like, surely it's only 10 years old, But like everything, it's like 50 years to an overnight success. But there is a website called Pickleheads that will show you in your area where all the courts are. This is all the pickleball courts in Houston, like tons of data. Like I think I want to own Pickleheads, your website, because this is like really cool. But this is in the Houston area. But there's some stats that I found that Pickleheads database now includes 68,000. courts in the U.S. and 18,000 were added in 2024.

Just in terms of echoing what you're saying, Bill, like dramatic rise in growth. And I would think, by extension, incredibly competitive. Yeah, this is, well, being competitive, but like this is Blue Ocean a little bit. Like, everybody's rushing in, the market is expanding, like pickleball is on trend, which is funny because it's 50 years old, but it's very, very on trend right now. So as you were reading this listing, I was just going, why is this guy selling? There's got to be a reason. Like, what's wrong with it?

And then finally at the end, he goes, there's a personal reason I will divulge it to qualified buyers. Now, that is music to my ears, right? Because he knows, like, this is maybe a forced seller. This is something out of the ordinary. This is how you get a good deal in small business acquisition, typically. Right? Somebody's got to sell for a forced reason. So how do we think these guys make money?

Travis, what's your feeling on that? They didn't mention food or drinks, right? I don't think so. They didn't mention it, which is surprising. Yeah, because I would assume that's like the main business model. Like, ah, the courts themselves are kind of the loss leader, and you make it up with selling beers. That's what I would think. At least that's what happens in Asheville, but Asheville really likes beers.

All the money's in Tater Tots, just so you guys know, you know, they're all lost leaders for Tater Tots. I mean, maybe this is more serious, more than you might think, like a hundred bucks an hour for the court. Oh, exactly. Wow. Yeah, like I said, more than you might think. So that's why we go to the park. A lot of these are like membership driven too, right? So pay a monthly subscription to be a member and then also rent the court or like you go to the park and you're outside.

But, you know, you don't have a reserve spot and you might show up and the courts are taken. It does say loyal membership base. So it sounds like you do have some recurring revenue on a membership level. And that's really, it's almost like a health club, you know, a gym. You know, I would look at it that way as like, what's the turnover? You know, how many new folks do you have to bring in every month to stay at even? And are you at capacity? You know, are the courts always used?

I think we are at sort of peak pickleball, you know, right at the moment. So you would hope so. You would hope that courts are like, while they're open, they're always being used. Which also then, if that's true, it means you don't really have any growth options other than what they mentioned, which was, you know, franchising, which is not easy. I know. Heather, I know we're not at P. Pickleball. Oh, we're not. I know.

I know when we'll know. Okay. When you start playing. That would be. And I didn't mention that I play. So that's true. there's still room for one more. I haven't gone out there.

So I've personally wondered about the fad state of pickleball a little bit. Just curious. I have no claims on it. I just looked it up in Google Trends. It's it kept peaking for a long time and it's back to like late 2022 interest levels, but maybe everybody knows what it is by now. Maybe that's not relevant. It kind of seemed like a little bit of a fad thing, but I don't know is here to stay.

Like my community's pickleball court is like booked all the time. Yeah. Pickleball seemed to hit like, the boomer community really early, like 10 or 15 years ago. Because I remember going to hang out with my in-laws in Florida, and they're in one of those kind of retirement communities. It's not a retirement home, Jerry. It's a retirement community.

And, like, they were all into it. Like, people talking trash on the court level. And then it seems like that has started hit, like, Gen X now. Like, all of my Gen X friends are like, hey, what are you doing for it? Like, guess what's happening tonight? There's like a pickleball thing. Believe it or not, everybody's like, we're going to play pickleball. and drink Miller Lights.

So, you know, it's, it seems like we're catching waves where it's hitting younger generations. I still think the 2030s and 40-somethings are like, this is a sport for old people. Like, that doesn't seem to be changing. But I think it is, Michael. I mean, this is actually sort of why I like pickleball is it's tennis for out-of-shade people. Right? Like, have you all ever played tennis? Tennis is brutally difficult.

There is so much running in tennis. It is seriously hard. But pickleball takes like everything that's fun about tennis and scales it down so you don't need to be an awesome shape to play. And so you can be, you know, you can be a weekend warrior and drink some of other lights and do it. I think it's great. I'm going to butcher this. But isn't pickleball, I don't know, like one of the top forms of injury for people over 60 right now or something crazy like that? Yes, I've heard that as well, Travis.

Yeah, because people coming off the couch playing pickleball. And like it is still somewhat athletic. Like you are moving here. It's not ping pong. But that's kind of why I'm bullish on it as just in completely eating tennis's lunch because our society is just not as athletic as it was. Just leave it up to the human nature. Yeah, exactly.

People want to try less hard and drink more beer, I think, and this really checks the box. As like a pool and three tennis courts, and I think they converted two of the three tennis courts to pickleball. Tennis players hate pickleball with a passion. Yeah. Because there's been no one on their tennis courts. for 30 years, and now people are using their tennis cards. So what are my moats if I own this business? Like, okay, so they're throwing off 400K in cash flow.

They're asking, it looks like 4.75 times that. Like, what, how do I know that's going to continue? Or do I not know? Maybe the two things would be location, if it's the premium location and it's hard for someone else to get one around there. The second might be like the community aspect. It's probably a lot of the people might be, you know,

they're building a social circle, not just a place to play. And so that might create a little bit of a sticky moat. How much of one? That's the question. The location is what I was thinking too. And they say they have a 15 year lease, which could be,

and it's an undermarket lease rate, which could be amazing or it could be terrible. Like if you're locked into a 15 year lease, and the business starts to decline, you as the buyer are now stuck with that liability. If the business continues to grow and there's growth potential in that area, you know, maybe it's a huge advantage. But they say it's indoor, but we don't really know, like, are there, you know, affinity items around it?

Like, do they have a sauna? Do they have, like, really nice restrooms? Is there food and beverage on site? Like, we don't know any of that. I would really. Are you ready to take a leap into business ownership but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business. Founded by Harvard MBA and acquisition expert Walker Dybul, the lab is your fast-track to success in the search diligence and acquisition process.

With hands-on support, world-class resources and a community of like-minded entrepreneurs, acquisition lab gives you the tools and confidence to navigate every step of the journey. And we're proud to call Walker and Chelsea, the lab's director, longtime friends of the project. podcast. They're passionate about helping entrepreneurs like you take the next big step. So don't wait to make your business ownership dream or reality. Visit AcquisitionLab.com today to learn more and schedule your free consultation. And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. I question whether the lease improvements, leasehold improvements were funded through the lease. So you kind of need to know what the rent amount is. It may be because I question when they said profitable from day one, well, wait a minute,

you have to spend a lot of money to open up an indoor pickleball facility, let alone the largest one in Houston. So there's that capital expenditure. Sometimes people are able to finance that through the lease. And when he says 15-year lease, it makes kind of a hint. Maybe that's how they did it. So you've got maybe a pretty hefty rent payment. So, Mills, you mentioned scaling. And personally, when I invest in most businesses, I like to see businesses that,

the amount that you invest or allocate is somewhat fixed and finite, but the upside is somewhat infinite or at least marginally so. This one seems very capped, right? Like you can only have as many pickleball courts as you can in this one facility. I don't know how much they're being utilized. Maybe they're like 20% and this is what they get. But if they're like 90%, then I don't know where you go from there, which might be why the seller mentioned platform and franchising and expansion that way instead. But to your point, you're probably having to sink, you know, hundreds of thousands of dollars into each new location, either, to Heather's point, you know, cash out of pocket or an increased rent with a tenant improvement allowance that's being amortized over, you know, several

years of the lease. Yeah. I'd love to see the time to break even with the investments here. Yeah, and how much Cap X has gone in to build it. I mean, that's the other mode here is the Cap X mode, right? Like, maybe they've got a pickleball palace here. that just is not economic to build, right? And maybe you can come in and buy it. This guy's going to take a bath on his cap X because of a personal situation. And now you've got a cap X mode because you've got 50% off building it, basically. What do you think of the landlord reimbursing the HVAC expenses?

That seems kind of weird. Oh, yeah, if you're the tenant, you like it. All I know if that happens, we're going to be at 60 degrees every day in Houston. People are going to be where it park us. Like, that's going to be my big draw. So for what it's worth, I actually think what this means is the landlord is ensuring the tenant against HVAC breakdown. So this is a gross lease, right? And so I think what they're highlighting here, and this is how my lease was.

If you are a commercial tenant, you are signing a lease, very typically you will be responsible to maintain the systems of the building. That would be closer to like a net lease, right? Like a ground lease. you are massively exposed. One of the big expenses in a building is the HVAC. And so if you got a 15-year lease here, 15 years can be the useful life of H-FAC. So if you're leasing a building that the H-FACs already got 10 years on it

and you sign a 15-year lease, you're going to be on the hook for new H-FAC. And this is a big building and big HV. Like probably... Oh, yeah. Yeah. H-Fint on units on the roof. Okay. Yeah.

I mean, this is a six-figure. expense for sure to replace this HVAC. So I think what this probably means, and this is how our lease was structured because I negotiated for it, which is fair because it's not your HVAC, right? Like you're vacating. Which is that so long as we paid like it was like $1,000 or $2,000 a year for HVAC maintenance contract, which is they come out every quarter and check it and make sure it's in good working order, that the landlord reimburse any big items, any expenses over like a deductible like $2,000 a year or something. And that was really valuable. So that might be what we're talking about here, which is kind of landlord insurance on the HVAC. That makes sense.

How many employees did they say they had, Michael? Two full time, 16 part time. Okay. 18 seems like a lot. But I guess there's got to be like a check-in desk to make sure that people don't walk in off the street. But what are all the other employees doing? I mean, cleaning, you know, sweeping the floors. But it makes me wonder if there is some other. other stuff. Or two shifts a day because you want to be open early and all the way to late, I guess. Yeah. I think you probably got college kids picking up, you know, 10 hours a week, et cetera, to sit at the front desk. It's probably that type of thing because it's not really skilled labor. It's babysitting. I would say it. You probably have like a washer dryer on site to

like wash towels and like refill the water drugs and stuff like that. So Heather, the financing aspect of this, they're very upfront about it. Yeah, they were realistic about it. It's not even maybe a full year in business at this point. It could be less than a year or just right around there. And no lender is going to want to step in with that short of a history and finance that. So yeah, no SBA loan here. What's a realistic deal scenario to look like? The problem here, I think this ultimately comes down to are we at peak pickleball? Because this is a, you put in a bunch of capax. This is not, the situation you're in is not too different from the guy who built it. This is a new facility. He put a bunch of

capax in the ground. You're about to put a bunch of capax in the ground by buying it, right? Functionally the same thing. And then it's just, is there a return on that? You know, over time, does Pickaball demand hold up for you to get your capx back out of the ground and make a profit. It's as simple as that, and that scares me because of the fad aspect. I would want some risk sharing a little bit. You can't get an FBA loan. There's no dirt here because it's leased. Like, basically no assets. You've got to come out of pocket on equity. So, like, I'm pushing for really heavy seller financing here. Probably one turn of equity at most, I would think. And maybe

the remainder of seller finance with some kind of hedge. place because you really don't have that much performance, you know, history to go off of. We don't know, like, is, you know, have they been in business just one year, 12 months? 1.1 million would be, I think, pretty impressive to kind of go from zero to 1.1 in 12 months. But, Travis, to your point, like, what's the run rate and how much capacity utilization do they have? That would be a very, very important early question to figure out, like, I mean, this thing could have capacity to do. three million in revenue and it's it's already on that trajectory and you just need to not mess it up.

I'd also love to know how they achieved 1.1 in revenue in basically 12 months. That's impressive. Like what do they do to get there? That part's really important. What's the requisition process like? Is it just we have a facility and it's all word of mouth or something more sophisticated? Well, I also worry, right, how much this is memberships? Like they probably had a big membership drive.

They basically leased it up, right? They got all their members in. We don't know what the churn is. It's only been a year. We don't know how, yeah, we don't know what the lifetime values are. But what I would worry a little bit about is you have some churn and like, can you run membership drive again or has everybody in the area who wants to play pickleball tried it? And you're kind of tapped out. So is your next membership drive less effective than your first one?

It's just hard to know. And I just think you have to price that in to the deal. And it may just be good marketing, but the fact that they talk about, you know, engineered courts professionally designed like to professional standards. specialty lighting, you know, for no glare. All that I think sounds really good. And maybe it is actually different than, you know, the competitors. But this could also be one of those things that everybody says it and it's table stakes. You have to do this to have members and you just don't know because you're an outsider.

I think I just thought of the thing that probably kills this deal. Well, why don't you tell us it with your rating on the deal? All right. Well, this is the diligence point that I need to know. it's all around the lease because we've talked about right are we at peak pickleball you put a bunch of capax in the ground and we've got to do risk sharing with the seller um so let's say you got a seller no but you've got another big fix expense here which is the lease and it's a 15 year lease and it's a purpose-built facility which means that you probably can't lease it to anything else

I would bet you a ton of money this lease is personally guaranteed PG yeah um and if this lease is personally guaranteed, that makes the lease like debt. So you are stepping into 15 years times, you know, the monthly lease payment of personally guaranteed debt to take this thing out. And you don't have risk sharing with the landlord. So you can get all the risk sharing you want from the seller. Let's say you pay them a turn of equity and the thing goes to zero and you don't pay them another dime. You're going to pay this lease for 15 years. Not to mention the lease is going to have to be assigned. And if they're at such below market rates like they say, the landlord may say, nope, we're re-rating. We're going to reprice this. As a condition of letting the PG go. Yeah,

the first PG. Yeah, maybe you do a stock deal to keep the lease without needing assignment. I don't know. But like that lease, on one hand, I think it's below market maybe, and that sounds great. On the other hand, if it's PG'd, now you're stepping into 15 years of debt plus the purchase price of lease debt plus the purchase price on pickleball which i think it'd probably be strong for a couple years what's it going to be like in 15 years now i'm scared i think you're right i think that makes me kind of thumbs down i mean it's in houston so it's really far away which doesn't that's a that's a two strikes against it for me but i don't know a lot a lot of factors really hard to get comfortable with the risk yeah that's the thing and stuff for me i'm i'm out just based on the risk

I mean, there's too much capital into it plus probably PG-leased. And the lease is not-P-Ged. I get more interested. You know, if you can walk away from the entity and now you're really, and you get good seller financing at a not-P-G-de-lease lease, I'm much more interested. The whole thing hinges on the PG-the-lease for me. I think the only way this gets done.

It's somewhat like the old rich guy who buys a bar because he just wants to own a bar and hang out in a bar. It's the similar. Like, somebody who just really loves pickleball, has a lot of money. it's not a risk to them. They just want to be part of the scene and this is where they hang out. That's the only way I can see this getting done.

Otherwise, this makes no sense financially. Well, and I think that's where... 100%. Wait, oh, Heather, did you have a chance to give us your thumbs up or thumbs down? It is a thumbs down from me. I totally agree with Bill. I think it's a PG'd lease.

And that's your financing. It's no good. So I'm thumbs down on this personally. I would be willing to give anybody any odds this deal gets done at this price or pretty close. to it because I have seen so many pickleball deals that don't pencil at all getting done precisely for the reason you're saying, Travis, which is like, oh, you're doing pickleball? I totally

understand that business. Here's a million dollars. And there's a rich old people totally willing to throw money at pickleball deals because they feel like they can relate to it. And like, I've gotten pitched a few, like a guy pitched me on one. And literally, he was like, okay, I want to come in and pitch you on this. And I was like, bro, I think you're calling the wrong guy. Like, I'm not going to do a pickleball deal. And then he canceled on me the next day. Like he'd been all hot and bothered. And he canceled on me. I was like, what happened? He's like, oh, somebody called in and took all the rest of the deal. I raised the $6 million immediately. I was like, okay, well, great job. Sounds good for you. It's so hard, right? With anything like this that gets hot and then dollars

rush in and a ton of people make a ton of money and I just always worry, am I going to be the guy that's too late to the trend. Yeah. You know what makes a lot of money? Rehab centers. They should be put their money in rehab centers. We agree. I've seen a lot of these like gyms and like CrossFit where it ends up that, Travis, to your point, somebody in the community already ends up buying it. And maybe a couple people pull their resources and they like go find, you know, a nice equity check.

And they're like, look, we're already here five days a week anyways. Between all of us, we'll kind of co-manage it. And I've seen some bad scenarios and I've seen some good ones. But more times than not, somebody in the community is the best buyer. And I kind of feel like the pickleball would be an extra good version of that. So when I lived in Thailand, you see a lot of like, you know, older wealthy guys, 100% of the time they were gentlemen, would go and like buy a bar because they don't really have anything to do and they're looking for that. Pickleball, since it does tend to skew towards the older population, like they need an identity.

Maybe they're really successful businessmen or women. They have not much to do. They got a lot of cash now. Like they need an identity and something to do. So this could make sense for them. It's a hobby. expensive hobby at $1.6 million or whatever they want for it. Yeah. And you could end up with pickleball elbow.

I got a really good piece of advice one time because, you know, a lot of entrepreneurs have this dreamed like, oh, I want to own a nice restaurant or a bar. And it could be like, you know, your thing, your place to hang out. And the way around that is just become like the best tipper at that restaurant, become the regular who overtips by a large amount. You get all the benefits of being like an owner, right? Like treat you like royalty, everything, but none of the downside of having to deal with that. I did that to my local restaurant. And it works. It's amazing.

Didn't I tell you to do that? Probably. It was probably you, yes. Yeah. It works. Thank you. Yeah. That's what you want.

You want to be the best tipping regular at your favorite restaurant. It's way cheaper than owning a restaurant. And the hours are way better. So much better. Yeah. I come in. They'll make me a seat. It works.

Same thing. Yeah. All right. Well, good episode. guys. So listeners, do us a favor. If you enjoyed this one, please let us know this is one of the larger roundtable. We had more our hosts here today, so we'll keep doing that. But let us know what you think, deal like it with two, three, four, or five

of us. And we'll see you next episode. Thanks for being here.