Owning a gas station

[Engelo Rumora]

Hey guys,

I hope your well.

Does anyone have any experience with owning a gas station?

The station also includes a convenience store and the billboard hasn't been utilized for income. How do you estimate expenses on such a deal?

I recently came across this deal and it was listed for $1.2million and asking price has now been reduced to $490,000.

It is showing revenue of $1.9million in 2012.

Thanks for your time.

[Joel Owens]

Revenue doesn't mean squat.

It could do 10 million a year and if 10 million is going out you have nothing. Now if the zero sum of profit is them taking out 200k salary, retirement, etc. then you take away those "add backs" to get true profit numbers.

It's true the gas you hardly make anything at all. It's the stuff inside of the store where the profit is and the gas is a loss leader.

In addition to what was mentioned above the lottery sales boost the bottom line also. Here in GA of the gas station has large lotto winners that get big payoffs as the station that sold the tickets.

Is the gas station on a desirable corner?? How much land is it?? Older gas stations were built on smaller parcels ( 1/2 acre etc.) The new trend is larger Quick Trips and Race Tracs for the everyday consumer. The smaller gas stations only survive usually if they are the only game in town or have deep client relationships over the years for repeat business.

If you have enough land there (1 acre) is a lot you can do for redeveloping a corner but the smaller the parcel size is on the corner the less you can do with it unless you combine other parcels and that gets expensive real quick.