Billboard Mastery Podcast: Episode 39

Things To Watch Out For With Old Signs

Bringing old billboard signs back to life can be very profitable. However, there are some things to watch out for that can ruin your plans and make your attempts to make money into losing money. In this Billboard Mastery podcast we’re going to review the check list of reviewing old signs opportunities.

Episode 39: Things To Watch Out For With Old Signs Transcript

Bringing old billboard signs back to life can be very profitable. However, there are a lot of things you need to watch out for to make sure that the sign works out as you hoped. This is Frank Rolfe, The Billboard Mastery Podcast. We're gonna be talking about the things to watch out for in bringing old signs back to life. Let's start off with the ground lease and permit, every billboard advert to have any value at all must have those two components. It must have a lease, hopefully, a lengthy lease that spells out exactly how much the property owner gets and how much you get. You get what's left over after what the property owner gets. You would never wanna take over an old abandoned billboard and bring it back to life unless you have a lease, and in the world of billboards, a lease needs to be pretty lengthy. I prefer 30-year leases, 15-year lease with 15-year option. Maybe you're willing to go 10-year with 10-year option, which is a 20-year, but you would never do like a year with a one-year option, something short like that. Don't even think about that.

You've gotta have long-term leases, our industry has been built since the inception of the idea of the long-term lease, on the idea that if you do something and you do it well, you get long-term cash flow, so you've gotta have a lease signed by the property owner, it can't just be a handshake, it has to be something that's actually written and it has to be long-term. Second, you have to have a permit. Now, not all signs have a permit, some come with a permit, whether it be state or city, others fall more of a gray area, the sign was built legally originally, it's been abandoned for a while, but now the question is, what happens since it's been abandoned? Did that permit die or does that permit still exist, whose name is the permit in? If there's any way you can get that permit into your name and make it 100% valid, then you definitely would want to do that. That would be very, very important. However, if you can't, it's gonna be up to you, you have to make a value decision based on the gray area and all the facts at hand, whether or not you feel that it's okay to proceed because if you build a sign and you bring it back to life, and you don't have a permit, they can definitely stop you and make you take it down, so make sure you understand exactly how the permitting process works. Let's move on to structural issues. Now, there are wooden signs and there are metal signs, I've had both.

I've brought both back to life. The wooden signs are typically made of old telephone poles, and typically all you have to do there is put the stringers back and the plywood faces and you're back in business. However, on the metal signs, it's not that simple, you need to have that metal sign checked to make sure there's no signs of fatigue or rupturing of any of the welds or the column, and make sure that all the bolts are tightened on it, you also have to make sure that you're only gonna put the wind load on it that it was designed for. Do we know how big the old sign face was? The issue is, those metal signs always have fairly rigorous engineering, are you within the confines of the engineering or are you creating a monster that may blow over in the first wind storm, if you increase the size of the ad face up, for example, 30%, you're gonna increase the wind load on that sign by 30%.

And where all the force that of that sign goes is right near the ground, about three feet off the ground is the pressure point on all columns or I-beams. If that should fail, that sign will collapse, so make very sure, structurally, you have a handle on what you're doing, there are people out there who can do structural engineer drawings of billboards you're bringing back to life and they can't typically do the foundation, so you won't have that accomplished, but just knowing what the strengths and stresses are, and if it's built properly, it should definitely be of interest to you. Also make sure you understand the laws regarding safety equipment, OSHA has been on a rampage for decades now wanting to make sure that all billboards are safe to be worked on.

That means that you need to have all kinds of items on there, catwalks, you need to have all kinds of wires that would delay falling that you can clip on, so you can't fall off the sign, so make sure you understand the safety equipment aspect, not all states are the same on this issue, you need to figure out what your state's requirements are, then make sure whatever you do that you abide by it, you don't wanna have someone get injured on your sign, you'd be sued for that. That wouldn't be a good thing for you or your insurance company, so just make sure you have a handle structurally on what in the world you're doing. Finally, visibility, a lot of these old signs that you bring back to life, one of the reasons that they were abandoned was visibility, and if there's a visibility problem with your sign, first thing you have to figure out is, what is it and who owns the right to trim back that obstruction? If it's private property, okay, now if it's private property, we can go to the person who owns that private property and we can say, "Hey, we wanna go ahead and chop down that tree," or whatever it is that you need to be done in order to get that accomplished.

But if it's on public property, highway right-of-way, public park, something like that, you can't touch the trees, you cannot touch the obstructions, so the first issue is, is it an obstruction you can remove? And if you say, "No, I can't because it's a national park or it's a state forest," then don't bother trying to bring the sign back to life because you can't ever remove the blockage, and you have to know that on the front-end before you get entwined with that sign.

The other issue is the timing, when you fix the visibility on an old sign as part of bringing it back to life, you wanna fix the visibility before you bring the sign back to life, because here's what happens. When you're talking about removing some kind of visibility issue, what appears to be an old abandoned pile of telephone poles, the person thinks there's no money in it, and they're willing to do it for a very, very small amount of money, even potentially free. However, if you put the sign back together and then approach them, they look at the sign and say, "Wait a minute, I can hold these people hostage because I know that McDonalds wants to advertise on there, I see the beautiful McDonalds ad and so, Gosh, this is now real money, this is my chance to get a real windfall." So the timing is also very, very important when it comes to solving the visibility on the billboard, and one other word of caution, do not ever cheat on this, don't try and go out there and solve it yourself with the chainsaw on a Saturday morning, people are typically unaware of the huge penalties that you have if you chop down a tree or tree limbs without permission of the property owner. In some states it could be a felony, the dollar amounts are gigantic, remember that that tree took decades to grow, maybe 100 years.

You think they're gonna let you off on just the price to buy a new little twig tree over at the landscaping shop? No, they are not, and they'll know exactly who to look for, the only one who would possibly have chopped that limb off the tree would be the person trying to remove the obstruction from your sign, and don't also forget the possibility of the highway patrolman going down the highway at the same time you got out your little chainsaw and you will be in big trouble. I've walked many a sign because I could not fix the visibility and I had no interest whatsoever in breaking the law to do so and I urge you to do the same. The bottom line you would always... Old signs can be very, very profitable to buy and bring back to life, one of my favorite signs of all time was that sign I owned out in Plano, I spent a few thousand dollars bringing it back to life, it made $20,000 a year like clockwork every year thereafter, so it's a great thing to do, but do understand the pitfalls, make sure that you do it in only the proper manner. It's very, very important if you're gonna be bringing old signs back to life you do so profitably.

This is Frank Rolfe, The Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.