Today I received a phone call from a prospective client who was in the pursuit of a dream job as a gas station owner.......don't laugh.......some of them do quite well.
As we discussed a few of the listed stations (as most know everything in commercial real estate is for sale for the right price) he began wavering on wanting a station. After we had discussed that credit cards charge the gas station owner on average 6 cents per dollar for a transaction and that margins in tough markets are only 15 cents per gallon. It became evident that all he'd be doing with the gas station would be purchasing a job that paid roughly $50,000 per year. Quickly the conversation moved into other investment avenues - apartments, NNN leases, mobile home parks and land development.
All of these have benefits and drawbacks and it brought it down to two questions -
"How invested do you want to be?" and "How much time do you want to spend doing it?"
Believe it or not this happens quite regularly, many people are unaware of the investment options available and how they might identify which rate of return could be higher. I encourage you to work with a professional in diagnosing these properties, whether it be an agent, a CPA or an attorney all can provide valuable information in assessing a properties value and rate of return.
Just as in HGTV's Flip this House, the profits are exaggerated and don't incorporate all the costs associated with the purchase and/or sale of a gas station!!!
Ryan Haddock
www.soundadvisors.net
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