All Forum Posts by: Kristi Kandel

Quote from @Cory St. Esprit:

I have a main street commercial unit in Butler, PA. The tenant moved out and we have it listed for rent. It was a brewery, then it was most recently a thrift shop. It's about 2,000 sq.ft of space, open ceiling, couple of bathrooms, etc. Wondering what, if anything, I could do to spruce up the place to make it more attractive to a potential tenant OR if there are ideas of what I could personally do to it that would create some nice cash flow for me (co-working spaces, etc.). There's 3 floors of old apartments upstairs we have an architect working on a plan right now. Rental listing available here.

We are looking at several mixed-use projects right now. I’d suggest talking to the city to see what the zoning allows for from a use and density standpoint. Also speak with the economic dept, Chamber, and any business incubators in the area. They are all going to have insights on the existing businesses that might want to grow/move spaces, types of businesses looking for spaces, and the need of the area. 

Housing is always a plus and depending on the location the city might be willing to reduce required parking for the location depending on the circumstances, street parking, or walkable public lots. 

When you work in partnership with the city you can see if they have economic grants, TIFs, etc. to help offset the remodel costs to both the commercial space and the residential. See if there are county or state programs to help with housing as well. MI and OH have quite a few programs in all of these areas.  

Quote from @Sumit Verma:

Quote from @Kristi Kandel:

Quote from @Sumit Verma:

Quote from @Kristi Kandel:

Quote from @Sumit Verma:

Quote from @Kristi Kandel:

Quote from @Sumit Verma:

I have many friends worked in convivences stores and gas stations by running the finances of the business I'm interested in purchasing a gas station. Hypothetically here is the situation. Let me know if it is possible or not, and in both cases what would be the requirements? 

Business cost - $1M Net Assessed Value - $700k (land + building) Looking for 900k, with 30 years of financing, no balloon payment.

This would be my first CRE, I would run and manage the business by myself.

Thank you for your time!

 What state are you buying in? I work with hundreds of gas station owners and operators each year. We are building Hydrogen Fueling stations in CA and we lease land from the gas station owners. 

Some are the operators of the business only, Some own the dirt only and ground lease to the operators, and some are both. Your systems and processes will make or break you. Most operators end up living at the store and working long days and weeks UNLESS they have multiple gas stations and can leverage that scale for operations. 

When it comes to environmental check to see if the property has a NFA (no further action) letter. That means that the prior leaks and soil/groundwater contamination have already been taken care of. 

Check to see where the owner is at on updating / replacing old UG tanks that need to be replaced with current standards. Those costs to both shut down the biz to upgrade/replace and the cost of doing the work are huge capital costs. 

Separately, lots of AHJs in CA are banning the building of new gas stations. CA is going to be extreme and the rest of the states are likely 10-15 years behind those initiatives. That being said, what is your long game and how would you handle gas being phase out and how would your business pivot? 

Thank you for your response Kristi!

Currently I am only looking into midwest. You are right CA is way ahead comparing to other states. I will take a look into NFA for sure. Its not being too long since the tanks are being replaced.

I believe most gas stations profit comes from the inside sales. When you say long term game, I will keep the gas stations (it will take long to completely wipe out gas phase) with a potential to stream into multiple different source of income. But that's all subjective to how much capital I can build upon.

 I would agree the Midwest will take the longest to change types of energy. Depending on the operator the inside sales can drastically beat out gas sales. I’ve seen many people get creative offering many projects like car washes, propane, u haul rentals, food, etc. It’s very hands on for most owners (high turnover employees  and employees stealing bc of cash sales) so as long as that’s something you’re willing to do it’s likely a great option for you. 

I do have a great plan to move forward with, it's the execution of the initial plan that's taking me long but, it is giving me more time. I have 2 more friends with me, we recently graduated from university and after seen the current market for the jobs we have decided to move forward with this and we have plans to be low cost creative by our food, offers and social media.

Currently I have no plan for the employees as I will be running and managing the store by myself. With only exception being allowing my friends to work couple days.

I am visiting banks to get some more information for how much investment I can secure with my situation once that is done I will actively engage in find the right business to acquire. Should you know of any lender please let me know.

Thank you!

 That sounds like a great plan to get started out of school. Your lenders will be very helpful in helping you underwrite the deal and develop a biz plan. That will be key to operational success.

You might consider asking the owner to seller finance part of the deal and also stay on for a transition period to help show you the ropes. Even if you’re going to change up operations getting those lessons learned from the current operator will help you a lot. 

Thank you!

I am having hard time trusting the business that are already on the market for sell. Just because you never know the actual reason of the sell of the business. The business I am interested is not in the market and I strongly believe that if I make the owner an offer he would most likely accept it (based on the previous business he sold) 
 
My plan is to do enough research on the location that I am actually interested in. I have contacted and spoken to the operators already regarding the current business conditions. I would send an mail to the owner's address to invite him to make the deal.

Owner's finance probably won't be an option in this case. Is there any thing you would suggest about where to find lenders or any information I should know before talking to banks?

@Sumit Verma ASK all the questions. The lenders can be your best friend and shop it around to a lot of lenders. This is a more risky asset for many lenders and this being your first biz? Learn as much as you can and don’t discount this process as education for the future  even if you don’t close 

Quote from @Sumit Verma:

Quote from @Kristi Kandel:

Quote from @Sumit Verma:

Quote from @Kristi Kandel:

Quote from @Sumit Verma:

I have many friends worked in convivences stores and gas stations by running the finances of the business I'm interested in purchasing a gas station. Hypothetically here is the situation. Let me know if it is possible or not, and in both cases what would be the requirements? 

Business cost - $1M Net Assessed Value - $700k (land + building) Looking for 900k, with 30 years of financing, no balloon payment.

This would be my first CRE, I would run and manage the business by myself.

Thank you for your time!

 What state are you buying in? I work with hundreds of gas station owners and operators each year. We are building Hydrogen Fueling stations in CA and we lease land from the gas station owners. 

Some are the operators of the business only, Some own the dirt only and ground lease to the operators, and some are both. Your systems and processes will make or break you. Most operators end up living at the store and working long days and weeks UNLESS they have multiple gas stations and can leverage that scale for operations. 

When it comes to environmental check to see if the property has a NFA (no further action) letter. That means that the prior leaks and soil/groundwater contamination have already been taken care of. 

Check to see where the owner is at on updating / replacing old UG tanks that need to be replaced with current standards. Those costs to both shut down the biz to upgrade/replace and the cost of doing the work are huge capital costs. 

Separately, lots of AHJs in CA are banning the building of new gas stations. CA is going to be extreme and the rest of the states are likely 10-15 years behind those initiatives. That being said, what is your long game and how would you handle gas being phase out and how would your business pivot? 

Thank you for your response Kristi!

Currently I am only looking into midwest. You are right CA is way ahead comparing to other states. I will take a look into NFA for sure. Its not being too long since the tanks are being replaced.

I believe most gas stations profit comes from the inside sales. When you say long term game, I will keep the gas stations (it will take long to completely wipe out gas phase) with a potential to stream into multiple different source of income. But that's all subjective to how much capital I can build upon.

 I would agree the Midwest will take the longest to change types of energy. Depending on the operator the inside sales can drastically beat out gas sales. I’ve seen many people get creative offering many projects like car washes, propane, u haul rentals, food, etc. It’s very hands on for most owners (high turnover employees  and employees stealing bc of cash sales) so as long as that’s something you’re willing to do it’s likely a great option for you. 

I do have a great plan to move forward with, it's the execution of the initial plan that's taking me long but, it is giving me more time. I have 2 more friends with me, we recently graduated from university and after seen the current market for the jobs we have decided to move forward with this and we have plans to be low cost creative by our food, offers and social media.

Currently I have no plan for the employees as I will be running and managing the store by myself. With only exception being allowing my friends to work couple days.

I am visiting banks to get some more information for how much investment I can secure with my situation once that is done I will actively engage in find the right business to acquire. Should you know of any lender please let me know.

Thank you!

 That sounds like a great plan to get started out of school. Your lenders will be very helpful in helping you underwrite the deal and develop a biz plan. That will be key to operational success.

You might consider asking the owner to seller finance part of the deal and also stay on for a transition period to help show you the ropes. Even if you’re going to change up operations getting those lessons learned from the current operator will help you a lot. 

Quote from @Sumit Verma:

Quote from @Kristi Kandel:

Quote from @Sumit Verma:

I have many friends worked in convivences stores and gas stations by running the finances of the business I'm interested in purchasing a gas station. Hypothetically here is the situation. Let me know if it is possible or not, and in both cases what would be the requirements? 

Business cost - $1M Net Assessed Value - $700k (land + building) Looking for 900k, with 30 years of financing, no balloon payment.

This would be my first CRE, I would run and manage the business by myself.

Thank you for your time!

 What state are you buying in? I work with hundreds of gas station owners and operators each year. We are building Hydrogen Fueling stations in CA and we lease land from the gas station owners. 

Some are the operators of the business only, Some own the dirt only and ground lease to the operators, and some are both. Your systems and processes will make or break you. Most operators end up living at the store and working long days and weeks UNLESS they have multiple gas stations and can leverage that scale for operations. 

When it comes to environmental check to see if the property has a NFA (no further action) letter. That means that the prior leaks and soil/groundwater contamination have already been taken care of. 

Check to see where the owner is at on updating / replacing old UG tanks that need to be replaced with current standards. Those costs to both shut down the biz to upgrade/replace and the cost of doing the work are huge capital costs. 

Separately, lots of AHJs in CA are banning the building of new gas stations. CA is going to be extreme and the rest of the states are likely 10-15 years behind those initiatives. That being said, what is your long game and how would you handle gas being phase out and how would your business pivot? 

Thank you for your response Kristi!

Currently I am only looking into midwest. You are right CA is way ahead comparing to other states. I will take a look into NFA for sure. Its not being too long since the tanks are being replaced.

I believe most gas stations profit comes from the inside sales. When you say long term game, I will keep the gas stations (it will take long to completely wipe out gas phase) with a potential to stream into multiple different source of income. But that's all subjective to how much capital I can build upon.

 I would agree the Midwest will take the longest to change types of energy. Depending on the operator the inside sales can drastically beat out gas sales. I’ve seen many people get creative offering many projects like car washes, propane, u haul rentals, food, etc. It’s very hands on for most owners (high turnover employees  and employees stealing bc of cash sales) so as long as that’s something you’re willing to do it’s likely a great option for you. 

Quote from @Sumit Verma:

I have many friends worked in convivences stores and gas stations by running the finances of the business I'm interested in purchasing a gas station. Hypothetically here is the situation. Let me know if it is possible or not, and in both cases what would be the requirements? 

Business cost - $1M Net Assessed Value - $700k (land + building) Looking for 900k, with 30 years of financing, no balloon payment.

This would be my first CRE, I would run and manage the business by myself.

Thank you for your time!

 What state are you buying in? I work with hundreds of gas station owners and operators each year. We are building Hydrogen Fueling stations in CA and we lease land from the gas station owners. 

Some are the operators of the business only, Some own the dirt only and ground lease to the operators, and some are both. Your systems and processes will make or break you. Most operators end up living at the store and working long days and weeks UNLESS they have multiple gas stations and can leverage that scale for operations. 

When it comes to environmental check to see if the property has a NFA (no further action) letter. That means that the prior leaks and soil/groundwater contamination have already been taken care of. 

Check to see where the owner is at on updating / replacing old UG tanks that need to be replaced with current standards. Those costs to both shut down the biz to upgrade/replace and the cost of doing the work are huge capital costs. 

Separately, lots of AHJs in CA are banning the building of new gas stations. CA is going to be extreme and the rest of the states are likely 10-15 years behind those initiatives. That being said, what is your long game and how would you handle gas being phase out and how would your business pivot? 

Quote from @Mitul Gandhi:

I am looking at some multifamily properties in Chicago and I am so confused when it comes to taxes here. I am looking at 2 properties in particular. 1 has taxes of $28K and 1 is $13K and both are in the same zip code both 4 units. Is there an efficient way to find the neighborhoods that have the least taxes?

I’d suggest reaching out to the county’s tax assessor office and asking them those questions. I know that in the states I invest in the sale of the property triggers the assessors office OR the school board to know that there has been a sale of the property, most likely at a higher dollar amount than the prior purchase. Aka the tax basis increases and tax can increase. 

Every state and country are different though which is why it’s important to talk directly to them to figure out their methodology and the anticipated taxes based on your purchase price. 

For example: in Ohio we bought a 4plex for 352k. The property taxes online said the owner was paying 3k a year. HOWEVER when we talked to the assessors office they told us that based on the purchase price the taxes would increase to 6.5k a year. So that’s the number we used to UW the deal. 

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Quote from @Charles Gorman:

Hi All! I have a lead on 13 parcels of land that used to have 120 units on them. Originally they were built in the 40s and torn down in 2016. My estimate is you could get a total of 250 units on the same land with modern designing. How would you go about valuing the land for a fair offer price? Market rents for 2br 1bath would be 1400 per unit for new construction and that's conservative. 

 1. Start with calling the planning dept at the city to define the zoning and allowed density 

2. Work with the city and local brokers to identify the exact product type to meet the housing needs of the area. (Apartments, townhouses, condos, etc.)

3. Run the numbers in the UW to see how big of a gap you have for new construction of those units 

4. Talk to planning at the city about available funds they for housing projects like TIFs, CRAs, Housing vouchers, housing grants, etc. 

5. Repeat that research at the county and state levels. 

6 review all info vs your UW and see if there is a land value above $0 that makes the deal work in today’s market. 

potentially consider a JV project with the property owner after doing the above as a way to make the deal work.

it’s not impossible right now based on your question but it is very difficult right now to get the numbers to work

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Quote from @Don M.:

Quote from @Kristi Kandel:

Quote from @Don M.:

We took a trip to Cape Coral last week.
The area seems to be getting back to routine.  There are still a ton of roofs with blue tarps needing repair/replacement and some debris sitting curbside.  
Otherwise, we thoroughly enjoyed the area.  In driving past our property, we saw that a bunch of fill dirt was brought in for elevation/grading.

We also did a visit to Pine Island which has a lot of areas of worse damage.  Driving through Matlacha to get to Pine Island was particularly tough to see.  The area truly looks devastated, yet you can still see the charm that was there and will be back again.  There were people out and about smiling and offering free food to other residents.

Through the ups and downs, we continue to believe in the project and the area.

@Don M. I live in fort myers beach. I thought I saw my roof on CNN so I biked in 3 days after the hurricane to find out if I still had a house. Thankfully I did.  

When I was reading your updates I was thinking how your permit timing was lining up vs the upcoming disaster. 

I’m a big fan of the area in the long run, and the SWFL communities have proven their resiliency the past 1.5 years and will continue to do so. 

While we don’t have state income tax here we do have the hurricane tax that comes with high insurance premiums and little real insurance benefits/help when it’s needed. As long as you’re building with future hurricanes (wind and flood) in mind you can ensure that you’re prepared for future storms. 

 I took that approach with everything I rebuilt at my property in FMB and there is a peace of mind from knowing exactly how to handle the next hurricane. The unknown is always the worst and now knowing what to anticipate from all sides (fema, insurance, SBA, damage, cleanup, repairs and rebuilding, etc.) makes every future storm a little more tolerable.

Part of it just comes down to the price we are willing to pay to live in such an amazing area. Beyond the actual dollars. 

I do believe that our area will all bounce back much stronger than before and what would have taken at least the islands another 30-50 years to redevelop is now reduced down to likely a 7-15 year rebuilding period. 

The only thing constant in life is change AND ultimately the only thing we control in life is our Response to what happens. 

 What you all went through on the islands was unbelievable.  Ive been impressed with the response, resiliency, and rebuild down there.  

 @Don M. Likewise! I think part of what keeps everyone pushing forward is see everyone else continue to roll up their sleeves and put the work in. Just like all aspects of life :) 

If you come across anyone needing help I created this website of free resources to share. A lot applies to FMB BUT it also applies to the surrounding areas. https://restorefmb.com/