Posted by Rafael on November 26, 2000 at 09:41:51:
Shell can lend you the money. They already know the business history and everything about it. New management and ownership transfer is the only thing changing. You also can find out with whom he is holdinding the note with and setup a deal to free the current owner. In all instance contact Shell explain your situation and go from there.
Good luck!
PS Gas Station is a better business than real states.
more money and quicker also more demand.
One family average may have 2cars expending about 50 a week on gas. There only can be about expesific distance between two gas station or to close or at a distance because of law regulation (state to state varies). I’m a parter with a CITGO mobil was to expensive.
GOOD LUCK!
I recently have been looking to buy a location for a Pizza Business. I can;t even find a location to rent/lease. In my town, the picking are slim. However, I ran across a Shell gas staion that the owner has health problems and wants to sell the business. The building is owned by the Shell Corporation. The building is leased. The business is for sell. It’s a real nice gas station. I can incorporate my pizza business with the gas station. However, I have one problem. I suggested the owner hold a note and he wants the full amount of the business for $65,000in cash. I really want this deal to fly. Any comments or suggestions? Thanking you ahead for your feedback. Joey
Joey,
BE CAREFULL!! Yes I’m yelling. I have been involved in the gas station business for almost 10 years. Their is much to know here. Have the tanks been upgraded? Any known soil or groundwater contamination? Who owns the tanks and gas station equipment. In the late '80’s early '90s most of the large oil companies sold their older stations to independant owners to avoid the liability associated with costly clean-ups. Oftentimes the tanks would be sold for $5. Station operators thought they were getting a deal but didn’t realize it can cost up to $500k to remediate a contaminated site.
There are so many questions to be answered. Who will you buy your gas from, a shell jobber? This business is very much a good 'ol boys network. If you notice their aren’t many ma and pa stores left because no one can afford to operate just one store. You have to have the buying power and storage capacity of many locations to leverage against fuel prices to make any $. Do you have any idea how much you gross off of a gallon of gas. Try a dime if you’re lucky. Then consider the cost of pollution insurance and equipment (A new multi-product dispenser with card reader costs upward of $20k each).
Posted by Jack Compton on November 26, 2000 at 12:38:31:
Joey, you’d better contact Shell Oil Co., beforehand, and make certain they’ll contract with you. The oil companies require an independent deposit placed with them (at least that’s the case with Exxon); they also do a credit check. You don’t want to buy the business and not be able to buy gas and other products from them. It might be different since they own the building, but I’d check first. Good luck! —Jack
Posted by Ed Copp (OH) on November 26, 2000 at 10:09:08:
that I have encountered recently, where the retirement age seller wants ALL CASH “preferably you give me the cash and then I will give you the deed”, resulted this way. I studied the matter completely and determined that the buildings are a liablilty (50+years old, partly home made and need to be torn down) and the land is worth possibly half of the asking price, and that is a stretch.
End result is that this old timer (slick operator) has his property overpriced (by double at least) and he knows this.
You might want to look at your proposal from this angle since you are not buying the property, just the remainder of the lease agreement.
Posted by BillW. on November 26, 2000 at 08:20:57:
Have you checked out his business to see if it is worth the price he is asking? It just might be a bargain. If it is, buy it if you can. Are you capable of getting a loan for the existing business as well as the improvements necessary to open the pizza business as well? If not, you might consider a partner. If his business is making good money, maybe one of his children would be willing to be a partner with you. That way, his family could keep a portion of the business and the cash flow and you could do the pizza thing. Keep asking and keep making suggestions to him.
BillW.
Posted by JohnBoy on November 27, 2000 at 12:52:36:
How did selling the older stations avoid liability to the big oil companies? Any issues pertaining to ground contamination includes EVERYONE in the chain of title regardless of whether they have anything to do with the property anymore or not. Even with the new owner being the first one likely to go after, who do you think they will end up going after in the long run? The little guy that owns it now that has nothing to take or the big guy that has all the money?
Don’t get me wrong. I’m not saying they won’t come after you and make your life hell, but just because the big oil company sold it to someone else doesn’t let them off the hook. They will FOREVER remain liable for any clean up cost…now or in the future. Even after your dead for 50 years then can still come back and go after your estate if their was anything their worth going after.
Also, you can’t hide behind any entity or BK to escape liability. You will ALWAYS remain personally liable once you become an owner in the chain of title.
Anyone buying any property with ground contamination issues should first make sure the soil has been or is tested BEFORE ever taking title. If it’s contaminated, then don’t buy it until the current owner pays to have it cleaned up!