Need help finding of a piece of commercial property 8 posts by 6 users

Posted: 11/26/2007 at 08:21PM

I'm looking to purchase the property that my family has ran our business out of for 30 years.

how do I value the property?

Is it valued by the income it produces?
the tenant lease it yields?
the future value/potential of the property?

a combination of all of the above?

the property is a convenience store / shell station.

the land is about 1/2 acre with about 100ft of frontage on a very busy highway.

we currently pay $4,300 a month for the lease, which we can easily afford and still pull a very good income.

any advice would be great, and more information is available upon request.

Posted: 11/28/2007 at 07:28AM

I would continue to do your research, but get him to give you a price rather than making him an offer.

You might try finding any recent sales of similar properties. You may have to piece it together, say from a convenience store/gas station sale and a land sale. Loopnet does have the ability to get recent sales, for a charge. You could also try contacting some commercial agents in your area. As you're driving around, look for signs on buildings or stores, and you should be able to locate some of them.

Jon

Posted: 12/07/2007 at 02:57PM

I agree with the previous two posts. It will save you a lot of time by having the owner give you a price where you can start your negotiations. Still do your due diligence to research the market value for that type of property. Look at properties that are both occupied by a tenatn and vacant. As a user of the property, it would make more sense to for the purchase price to be based off of the property if vacant. If you used the income approach, you are basically valueing the income stream it creates. However, use whichever means of valuation that is in your benefit.

Posted: 12/13/2007 at 07:59PM

great advice thanks guys.