Investor · North Richland Hills, TX · Member since 2013 · 1k+ posts · 1k+ votes
Hello BP!
I am considering a small 16-units apartment complex but there is gas station across the street from it. I know that gas stations present potential environmental problems and Phase I report is a must. However, is there a quick rule of thumb as to how close a gas station can be to a residential building without causing any issues? Something like: if the distance is X, then don't even look at that apartment financials - run away. But if is the distance is X+Y, then it's OK to proceed further.
Location, if that matters, is Denton, TX (DFW metro).
Investor · Fort Worth, TX · Member since 2014 · 60 posts · 89 votes
10y
@Nick B.Good question. I haven't thought about that before. Maybe one of our lenders, like Paul would know better and seen that pop up. Might shoot him an email.
Real Estate Broker · North Richland Hills, TX · Member since 2013 · 1k+ posts · 607 votes
10y
It really depends on the existence and size of any leak(s). How old is the station and the UST's? Is it owned by a major oil company, or by a mom and pop? In general, the liability for environmental problems would be with the source, but you'd want to gauge their ability to cover any current &/or future liability.
Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
10y
Hi Nick-
It's not just distance but the grade of the land between the apartment building and the gas station and also its elevation. I bought one across from a gas station and prior to getting the Phase 1 in talking with the owner of the Environmental Services company he said he was confident based on the grade of the land, there would be no issue (because any spill/leakage from the gas station would head in a different direction - away from my building). Also, look into getting a "modified Phase 1". The company I went with had a name for it but (Site Review/Site Assessment). Basically you pay a lower fee and they do all of the initial research work they would normally do and if nothing suspicious shows up then they don't continue. Best case scenario you save some money (in case you don't end up buying the building). Worst case, you end up paying the full Phase 1 fee. The owner of the company, based on the initial results they found, assured me that based on his experience there was no need to go any further. And that in his opinion, he would confidently buy the building himself without concern of any environmental issues.
Investor · North Richland Hills, TX · Member since 2013 · 1k+ posts · 1k+ votes
10y
The station is Chevron. Not brand new but not terribly old either. The surface is flat, so if there is a leak it could go in any direction. The property was last traded in 2012.