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Austin, TX
You would be surprised how many real estate investors find themselves considering the latter scenario when they have no experience in the car wash or gas station industries. For these types of specialty real estate, thorough issue spotting is crucial. Consider the following points and Contact REC broker Alexander Becker with additional questions -
1. Environmental due diligence is of paramount importance! Gas stations are notoriously prone to underground leaks, causing environmental harm and expensive remediation. If left unaddressed, the EPA may pursue all known owners on the chain of title to cover clean-up costs if the current owner has not taken appropriate steps with the government's involvement to remediate the problem.
2. Ask yourself if you are prepared to run a business. Automatic car washes and self-serve gas stations may seem autonomous but they do not run themselves and the principles of running any business (and good customer service regardless of time of day) certainly apply here as well. Conversely, car wash and gas station properties leased to a tenant who operates the business can often be purchased an "absolute triple net" basis, meaning the landlord has no maintenance responsibilities whatsoever.
3. "Special assets" like car washes and gas stations may be classified by banks as "high risk assets" and often require special financing that may entail higher down payments, higher interest rates and shorter terms. Seek pre-approval from a lending source before you start the real estate search for car washes and gas stations to ensure you can make financial sense of the acquisition.
Contact Alexander Becker 720-707-1539 abecker@rec-colorado.com
You would be surprised how many real estate investors find themselves considering the latter scenario when they have no experience in the car wash or gas station industries. For these types of specialty real estate, thorough issue spotting is crucial. Consider the following points and Contact REC broker Alexander Becker with additional questions -
1. Environmental due diligence is of paramount importance! Gas stations are notoriously prone to underground leaks, causing environmental harm and expensive remediation. If left unaddressed, the EPA may pursue all known owners on the chain of title to cover clean-up costs if the current owner has not taken appropriate steps with the government's involvement to remediate the problem.
2. Ask yourself if you are prepared to run a business. Automatic car washes and self-serve gas stations may seem autonomous but they do not run themselves and the principles of running any business (and good customer service regardless of time of day) certainly apply here as well. Conversely, car wash and gas station properties leased to a tenant who operates the business can often be purchased an "absolute triple net" basis, meaning the landlord has no maintenance responsibilities whatsoever.
3. "Special assets" like car washes and gas stations may be classified by banks as "high risk assets" and often require special financing that may entail higher down payments, higher interest rates and shorter terms. Seek pre-approval from a lending source before you start the real estate search for car washes and gas stations to ensure you can make financial sense of the acquisition.
Contact Alexander Becker 720-707-1539 abecker@rec-colorado.com
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