All Forum Posts by: Dan Cho

I think I've read that your delinquent credit goes away after 7 years. Although its not impossible to get financing with a large down payment and such. Start calling banks or mortgage brokers who may be able to offer more insight.

Hey Reggie,

Welcome to BP!, I think it'll be tough to give you an estimate, without more details. First off you have to look at what type of market are you in? Is it a urban environment or city dwelling where labor will probably be cheaper in urban vs city. 

Also asking for an estimate is like dependent on if your going low or high end, an example of this might be I was recently looking at flooring for my property and labor was consistent at $1.99 per sq ft however material would have costed anywhere from .59-$4.00. So an easier way to calculate might be to find out the labor cost and then see how much you can get the material for. Just my 2 cent.

Yea always felt auction.com was bit unethical. I loved a property on there with a great price. However after reading about how their system worked, I thought it was unethical for to bid against me. Its like going to a car auction and the auctioneer is bidding against you.

Hi all I wanted to get your opinion on how I should proceed with a purchase of a building. So I recently had an inspector go through the building and he noted to me that the flooring in one of the building would have to be replaced as the wood was buckling. 

There is also an issue with not knowing what ampage was coming in one of the units where he recommended that an licensed electrician come out to check to see what ampage was coming in as this posed a fire hazard as well. 

Another unit did not have their electric turned on so we couldn't test anything in there.

I contacted my lawyer about this and he stated that in our contract it states "This contract is contingent upon a written determination, at purchaser expense, by a licensed architect or licensed engineer or by an agreed third party that the property is free from structural, mechanical, and/or environmental defect not exceeding $1,000". My lawyer has informed me that these issues don't fall under the structural, mechanical, or environmental factors. How do you think I should proceed with this?

H all thank you all for your support. At this time I'm looking for a hotel before the financing. Thank you.

@Brian C. Thanks Brian for providing your insight, I actually wasn't thinking about those factors. Doing the calculations if the station was doing 2,000,000 gallons a year and I received weekly deliveries I would be receiving 38,461 gallons. Just a 15 cents +/- would be about $5,800 a week. God knows I guess with this you better be capitalized extremely well to handle those ups and downs.

I also didn't consider theft, I do have employees however they are family members. I guess I'll stick out of the gas industry for now.

Thank you all for providing so much information on the matter. Its certainly something that I'll contemplating a bit. There were a variety of reasons that I was interested in pursing this. 

First off this gas station isn't just a regular gas station, it services 18 wheeler as well. Thus instead of just your average car that just takes 13-20 gallons of gas each of these usually take 100-200 gallons of diesel. I've also been told that you make more on diesel, however I'm not able to confirm this at this time.

Second more importantly I've been told that you don't make your money on the gas, but instead your making money on the items sold within the store. Most of us here probably go to the gas station, swipe credit card, and then leave. However from what I can see most truck drivers on the road don't just fill up and leave, you've got about 200 gallons of diesel and your travelling from NY to CA, you're probably not going to be in a hurry to get on the road especially since your probably driving 8-14 hours a day.

I've also noticed that most of these drivers spend the night in the parking lot in their trucks, thus this location also has a diner and can serve dinner as well as breakfast the next morning. I just see a lot of potential serving this niche crowd, whereas previously I would have scoffed at the ROI of owning a gas station.

What do you guys think? 

@Varma Adduri could you tell me what a z report is?

Hi I recently came across a truck station gas station deal in the northeast, selling for about $2.5, revenue around $6.0, and cash flowing around $500k. Seller is claiming that they do over 2 million gallons a year. 

I'm trying to figure out of this would be a good owner/operator type of business, is there anyone here who owns a gas station that I could reach out to gain more insight on this matter. Thank You.

Hi Winston I recently asked the same question asking the same thing about hotels. I also talked extensively with Mr. Nitin Bhakta, discovered through BP, and maybe friend him and shoot him your questions. He has extensive knowledge regarding the hotel industry working in it since the age of 5 and now owns multiple hotels in the Texas region.

Anyway this is my take of how valuation are done and should be researched more. From what I've been told most hotels will give you a revenue and a quick estimate is to multiply by revenue multiplier, 2.5-3.5(My Max). Obviously these maxes could go higher depending the market, San Fran and New York, your not buying hotels in this multiplier.So if someone tells me that they had $100,000 in revenue last year and are selling it for $300,000, I'd say that there selling it for 3.0x, which I would think ok its seems like an average deal, but start negotiating at at maybe 2.5x, after extensively researching the cash flows.

I would also do calculations and see what is my income after ALL EXPENSES, so what is your gross profit. I always want to do better than the stock market so I usually like to aim for 15% of my invested money, so in the example above they want 20% down, I would put in $60,000, but I better be making $9,000 PURE PROFIT.

Yes land usually comes with the deal unless they state otherwise.

Estimates get it at what you think is a fair price and minus the repairs that you think are needed.

Always be negotiating, worse thing they say is no.

This is how I've been going at it but then again I've only really been researching the topic for less than a week so take my advice with a grain of salt.