Rental Property Investor · Liberty Hill, TX · Member since 2014 · 285 posts · 166 votes
10y
Bad idea, one of my best friends retired a few years ago and sold 6 properties he owned surrounding a gas station in Flint Michigan. Thinking he had a nice nest egg to be paid out over the next 20 years.
After the EPA went after his buyer the buyer defaulted and my friend is still being harassed about cleaning up the sites. He didn't own the gas station just the surrounding property but the owner of the gas station died so the government went after the only person with deep pockets.
The test you need is called a stage one and you need an environmental engineer to do the test. It is not cheap.
Wholesaler · Wentzville, MO · Member since 2014 · 155 posts · 56 votes
11y
What type of property are you buying next to a gas station? My first concern would be the underground tanks the gas station uses and if they leak would they contaminate your property?
Real Estate Broker · Los Angeles, CA · Member since 2015 · 51 posts · 16 votes
11y
Even if there was never a chemical spill, future buyers might be overly concerned about this question themselves. And most people are too lazy to do the research to find out. I know RealtyTrac shows information about nearby cleanups. Anyone have any other suggestions for where to get this info?
The upside is that you could get a better deal on commercial real estate next to a gas station, even if it is clean, just because of the stigma. I wouldn't do it for flipping, because it could take a lot longer to sell. If you wanted to open a fast food franchise however, a clean gas station would make a decent neighbor. Don't bother with residential properties next to gas stations, unless they have been rezoned for commercial. Then a tear down might be feasible.
Investor · Buffalo, NY · Member since 2015 · 67 posts · 7 votes
11y
it is zoned commercial. the area is a nice area with the gas station being a brand new Sunoco Station/convenient store. I was planning on renting out the houses and holding long term. The gas station is on the corner lot and we are directly next door . If something anything larger than the station wanted to be there they would have to purchase my lot. I know that speculative but its definitely in the back of my mind.
They have accepted 110,000 and it appraised for 130,000. It doesn't cash flow great but I think it will be a good long term play.
How do you guys feel about purchasing based on appreciation?
Investor · Houston, TX · Member since 2014 · 103 posts · 11 votes
11y
I may not have a ton of investing experience, and I know an older laundromat is a different story from a brand new gas station...but..
my family owns the building a laundromat is in, and they had an issue with a spill. Long story short it's been a few years dealing with people trying to claim money, etc etc. We finally found a buyer (at a huge loss) and we are even liquidating the S-corp that was associated with the property to create a new one.
I know that I will avoid all such properties in my investing.
Edit - that property is also located in NY, where I just realized you're located.
Rental Property Investor · Liberty Hill, TX · Member since 2014 · 285 posts · 166 votes
10y
Bad idea, one of my best friends retired a few years ago and sold 6 properties he owned surrounding a gas station in Flint Michigan. Thinking he had a nice nest egg to be paid out over the next 20 years.
After the EPA went after his buyer the buyer defaulted and my friend is still being harassed about cleaning up the sites. He didn't own the gas station just the surrounding property but the owner of the gas station died so the government went after the only person with deep pockets.
The test you need is called a stage one and you need an environmental engineer to do the test. It is not cheap.
Thanks for sharing the story! l'm looking into a house in excellent location, unfortunately right next to a small gas station/auto repair shop. Even the stage one soil sampling comes back clean now, there's no guarantee there won't be any leak in future. It's a potential issue always going to be there.
Real Estate Agent · Grand Rapids, MI · Member since 2014 · 493 posts · 200 votes
10y
I'd work through an experienced commercial real estate broker with specific experience with contaminated properties. There are things you can do to mitigate future lawsuits, etc. under Michigan law regarding contamination. It may or may not be a problem...but best to get someone involved that really knows their stuff.
Rental Property Investor · Milpitas, CA · Member since 2015 · 21 posts · 5 votes
10y
Originally posted by @Account Closed:
I'd work through an experienced commercial real estate broker with specific experience with contaminated properties. There are things you can do to mitigate future lawsuits, etc. under Michigan law regarding contamination. It may or may not be a problem...but best to get someone involved that really knows their stuff.
Thanks Clay! The property has been sold right away, seems the buyer doesn't care about the gas station situation. Nevertheless, a good lesson learned.
Even if there was never a chemical spill, future buyers might be overly concerned about this question themselves. And most people are too lazy to do the research to find out. I know RealtyTrac shows information about nearby cleanups. Anyone have any other suggestions for where to get this info?
The upside is that you could get a better deal on commercial real estate next to a gas station, even if it is clean, just because of the stigma. I wouldn't do it for flipping, because it could take a lot longer to sell. If you wanted to open a fast food franchise however, a clean gas station would make a decent neighbor. Don't bother with residential properties next to gas stations, unless they have been rezoned for commercial. Then a tear down might be feasible.
I am looking in to a nice 3 family for investment next door to a gas station in a nice area.
do you see any problem with it?
(I understand that some people might not want to rent it, but some will....)