***Opinions on 1st investment with Family - Complex Commercial Space

[Dean B.]

Hey all, Thanks for viewing the questions and apologies in advance for the long message.

I'm in a bit of a struggle deciding on a new, first investment that is as follow:

Property: Previously a 60 year old gas station, most recently a fully functioning restaurant. Unsure of exact details but it had issues with gas station cleanup due to minimum ppm for ground water/gas. the laws have changed minimum to now make this "pass" code, but that is major issue with property. Otherwise it needs some rehab to get up and running (approx $20k).

I have about 150k in cash and use this for mainly business expenses/inventory. My family has locked in (paper work-wise) a property that was sitting on market for some time due to a 60-year old gas station on property - proper cleanup issue (was most recently a restaurant). If we do not make cash payment, owner will release offer and go with another offer at $180k from another investor. Property most recently sold for ~$300k in 2008. It is an ideal location for our needs (family business).

Laws have changed the minimum ppm in our area and it now should pass code to allow construction on property for restaurant/tasting room (this is reason no one would touch this property until now). My family has winery/vineyard and wants to turn this property into a tasting room. However, they are unable to purchase said property with cash as they are not as liquid right now. I am. The deal that would be arranged is that I would buy the property at approx 150k cash, then have a NNN lease of about $1000/month billed to them. My family would do full construction and development of property on their dime. (previous tenant was paying $5000/month in rent). It is currently unusable as functioning restaurant and would require about $20k rehab to get it up and running, approximately 6-8 months timeline for completion with permits factored in.

The two overwhelming questions I have are:

1. Is this a good first investment for $150k cash? Or would a multi-tenant rental be more ideal (residential)? I need to put this cash to work, but I'm in a struggle between helping my family and other investment options.

2. (this one I do not know answer to at all) Would I be able to leverage this property (prior to construction) and "get" money out of it for business expenses (i.e. equity business loan)? Or would construction have to be done prior to this happening. The issue is that I use cash on a bi-monthly basis to purchase inventory and I would at some point need to use the property for a business equity loan.

I realize this is a pretty complex scenario and I do understand that whoever responds...it is only an opinion. So please feel free to respond candidly. I am consulting multiple parties on this as the deadline is in the next 48 hours, so know that any responses will be treating with caution.