My questions are directed mostly towards Frank, but any opinions would be greatly appreciated.
I’m a college senior who will be graduating in June. I have a job lined up that will pay about 4500 a month. I’m projecting I will be able to save at least $8000 a year for the first couple years. I’m searching for smart investments to make on those savings. The idea of billboards is fascinating to me and I will be sure to buy the instructional course if I decide this is a viable option for me. I just have some basic questions:
Generally, what is the best way to start in the industry? Buying existing signs? Building new ones? Flipping them or leasing them out myself?
Also, at my projection of having 8000 per year at my disposal, approximately how long would it take for me to get started? I know that answer is dependent on several factors, but just a rough figure on startup and maintenance costs per sign would go a long way in helping me decide if I would like to pursue this further. Would you suggest looking for financing from another source, such as family memebers or bank loans, to help me get started?
By the way, I live in Southern California, if that’s pertinent.
If I were you, I’d start out building (and buying where appropriate) old-fashioned wooden billboards. For $8,000, you could probably build two per year. You’d need to find locations in smaller markets with a major state highway or farm-to-market road with decent traffic, You’d build a wooden telephone pole sign with maybe 12’ x 24’ wooden faces (standardized, so usable down the road when the market develops), and you’d rent them for around $2,000 per year paid in advance. The advertiser would pay for the vinyl and installation. There would be no lights. You would net, after groundrent, about $3,000 per year (two faces to each structure). After the second year, you could continue to build the signs using just the net income from the earlier signs (goal of two signs per year). In five years you’d have 10 signs paying out $60,000 per year. You can then just keep building them as opportunities arise.
This is the safest, easiest way to get started. Monopoles are extremely expensive, and you would have no diversity. If one comes along once you know what you’re doing, fine. But they can be a risky start.
Thank you so much for the quick reply. I’m just kind of curious as to how common these results are. If I’m understanding the figures and doing the math correctly, that would mean the profits, after groundrent, from a single 2-faced wooden sign would pay for the construction costs in just 16 months. Is this a best case scenario? Or is it common to find an advertiser for that price in a good location?