No idea what to do with an old gas station my father left me (crosspost r/RealEstate)
Hi there, sorry if this isn't the right community to post this in but I'm at my wits end. My father passed away last year and, amongst a few other things, left me with the property of an old gas station he used to manage. The place is pretty dilapidated but it's in the middle of a relatively busy part of the city and only a block or so away from the local high school.

The real estate agent seems to think we can get around 190k for the property, but in the past year since acquiring the property theres been zero interest. A big reason is that because of the properties proximity to a school you cant get a liquor license for it. I've asked if we can cut the price even further but he seems to think that if anyones interested in the property a price drop of 40k won't change their minds (is this a good assessment?).

Whats worse, I just got told by the Missouri state natural resource department that because the tanks have been out of use for 5 years they need to be permanently closed. I've left a message with the analyst who sent the letter and messaged a few firms capable of doing this but I just don't really have the money to pay for it right now, I just got out of college.

What should I do in this situation? Get a new real estate agent? Call around to potential buyers (how would I even identify this?) and see if they'd bite? How can I deal with this situation if it turns out I cant afford to close the tanks? Is filling the tanks going to even further reduce the value of the property?

For context this is in St. Louis Missouri.
[{"id": "i82eguz", "text": "I would contact a developer who specializes in the development of single tenant net lease deals. I work for one and we\u2019ve done a few deals where we buy an old gas station, demo it, and then rebuild for a tenant we have in tow. \n\nYou can either sell it straight up for whatever price you negotiate, or If you find one who\u2019s creative enough, you might be able to take the position of a partner where your ownership of the property can be used as equity in the deal. Sometimes this can be a more profitable approach depending on the tenant they build for, your equity %, and their exit strategy.\n\nThe other option would be to look for national tenants who typically gravitate towards ground leases where they do the improvements themselves. This is a bit more of a hands on approach which will still require you to do some work and make the additional investment to make it pad ready, but could be the most profitable if done correctly.", "replies": [{"id": "i82ex8i", "text": "This sounds like a really good solution to our problem. What would be a good method of identifying potentially interested developers in the area?", "replies": [{"id": "i8358kh", "text": "I always start with a Google search. Something as simple as \u201csingle tenant net lease developers\u201d get you on the right track. I also know there\u2019s a big pool of brokers who specialize in the types of net lease deals I mentioned in the first comment, so you may reach out to one of them and just ask around to see if they have any developer clients who may be interested in your market", "replies": [], "depth": 3}], "depth": 2}, {"id": "i82q5pv", "text": "If the gas station has an asking price of $190K there\u2019s a reason there\u2019s no interest. \n\nIt\u2019s off the beaten path and no nationals have interest. \n\nI\u2019m not being harsh, just honest.", "replies": [{"id": "i82tkrl", "text": "Its not off the beaten path, in fact its pretty central. From what I've been told by the realtor the biggest issue is a lack of a liquor license and that there is a degree of risk involved with the tanks. If they're clean then its not a huge issue apparently but if they had been improperly sealed the contaminants could be expensive.", "replies": [{"id": "i82wa4k", "text": "Those tanks and that lingering question about contamination will be a stone around the neck of anyone trying to redevelop the property.  Phase 2 will almost certainly be required.\n\nIf the state won't come off permanently closing the tanks because of the 5 years you've effectively lost a replacement gas station as a tenant. Explore with your contact at the DEQ if you can get the tanks back into grace with the state.  If you can, it's a much smaller hurdle to find someone to lease and operate as a gas station (even without the ability to sell booze).", "replies": [{"id": "i83bsjl", "text": "What is Phase 2?", "replies": [{"id": "i83cvy5", "text": "Phase 2 environmental assessment. They will drill holes and take samples to determine if there is any contamination.", "replies": [], "depth": 6}], "depth": 5}, {"id": "i83db2q", "text": "I don't think its feasible to save the station at this point. The building is trashed, the canopy is tattered, and I imagine the tanks are in a poor state. I think we have it listed as redevelopment land. Thank you for the advice tho!\n\nWe dont have an environmental report for the land itself -yet- but we do have one from the neighboring property that is downhill from a year or so ago. It showed no contaminants but, of course, that doesn't necessarily mean we dont have any.", "replies": [], "depth": 5}], "depth": 4}, {"id": "i82wrpp", "text": "do you know how large it is?  The thing is if its really something a national tenant would go into and you can do a dev deal on the lands going to be worth a few multiples of what you are talking here.  \n\nchik fil a, star bucks, or pizza hut don't care about a liquor license.\n\nIf its the type of location they'd go into they'd not blink at paying 190k.\n\nWhat is by this in the immediate area?  Is mc donalds across the street or uncle willys bbq?\n\npaint us a picture", "replies": [{"id": "i82xbhx", "text": "It's right next to a new health center and a high school. Fast food right across the highway from it. Lot is 20,473 SF", "replies": [], "depth": 5}], "depth": 4}, {"id": "i82wvhr", "text": "Is it too small to develop? What are the setbacks?", "replies": [{"id": "i82xxbv", "text": "It's in a developing area right off a highway exit surrounded by other commercial property. A school is 1 block away. The properties biggest set back is that it needs to be fully redeveloped; the building is dilapidated, the tanks are old, and the pavement is cracked. It also cant get a liqueur license due to its proximity to the school. Lot is 20,473 SF", "replies": [], "depth": 5}], "depth": 4}, {"id": "i82x0jx", "text": "DM me address. I\u2019ll dive in and may buy it. I don\u2019t care about liquor license.", "replies": [{"id": "i85c4jd", "text": "Don't ignore this person. Also, you might consider an \"as is, where is' auction. Takes some of the stress off the deal but not the material issues that someone will have to deal with those tanks and environmental studies. Good news you aren't the first to face this situation.", "replies": [], "depth": 5}], "depth": 4}, {"id": "i82yb27", "text": "Are you consulting with a residential realtor or a retail focused broker? \nAre there any national tenants close to your site and is it at a traffic light intersection?", "replies": [{"id": "i830s8d", "text": "Hes a commercial realtor, I'm not sure what his focus is though. It is right at a traffic light intersection right next to a highway off ramp. There is a newly built SSM medical building right next door and several major chains across the highway from it. It's one block or so from the local high school.", "replies": [{"id": "i839cy5", "text": "It sounds like a good site. If you're looking to ground lease it or do a bts, have you gotten an engineering report showing what can potentially be built there? May be a good idea even if selling it. Has your broker spoken to you about that? Hard to market without really knowing what can be built.", "replies": [{"id": "i83d78q", "text": "No we have not, but thats a good idea. He currently has it listed as redevelopment property since rehabilitating the station is likely too big a challenge than its worth. Should I talk to the realtor about this or hire someone myself?", "replies": [{"id": "i83ftwo", "text": "If the realtor doesn't know about this or have any connections to engineers who specialize in this, maybe best to find a new one.   \n\nWhat state / area are you in ? Feel free to dm me", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "i83at2p", "text": "Hey man, I develop pad retail (net lease properties). There is some OK advice in here, but nothing that I would hang my hat on... The issue youre going to run into is going to be environmental. The USTs (underground service tanks) have been considered decomissioned. If you sell to the next guy, even if the gas station was operation, he will need to replace the USTs, which is a massive cost. Envrionmental issues will make it 100% impossible to finance it.\n\n&amp;#x200B;\n\n20K SF of land is too small for most  new building national gas stations due to pump ratio, and almost too small to do a drive through unless its a dutch brothers coffee shop, or a salads n go... I wouldnt mind taking a look and giving you an honest assesment if you can provide a survey", "replies": [{"id": "i83cc9f", "text": "Came to say something close to this. Getting rid of that assessment on the tanks will be pretty much impossible. Id sell the land to a developer", "replies": [{"id": "i83dl30", "text": "That seems to be the consensus. I have a meeting planned with my realtor this evening to see about reaching out. I've already sent the listing to a couple potentional developers in the area.", "replies": [{"id": "i85f8s9", "text": "Ditch the realtor and go to CBRE or Cushman. Rezi agents have no fucking clue what they\u2019re doing in commercial.", "replies": [{"id": "i85i76r", "text": "Facts. Colliers and JLL are also decent. Given small deal size, Marcus Millichap as well", "replies": [{"id": "i87wt15", "text": "I\u2019ve always viewed M&amp;M as bottom feeders.", "replies": [{"id": "i89ffay", "text": "Generally agree, but their IPA teams are really good. Also depends on the market. Those other big 4 brokerages might not take this small of a deal, but still M&amp;M will be better than a residential realtor", "replies": [{"id": "i89stsg", "text": "Trueeeeeeeeeee", "replies": [], "depth": 11}], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "i86cpco", "text": "Plus it may require a rezone to be a coffee shop, restaurant, retail etc which would only be worth it if the location was phenomenal", "replies": [], "depth": 5}], "depth": 4}, {"id": "i8z9pi3", "text": "What\u2019s the DoT car count on the road in front of it?", "replies": [{"id": "i8zie1i", "text": "I\u2019m not sure what it is for the roads that intersect on the corner it\u2019s on but the highway that it is directly off of serves over 125,000 cars a day", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "i83k3q7", "text": "environmental issues also likely", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i82euxz", "text": "can you post your agents marketing pack?", "replies": [{"id": "i82f3dq", "text": "&gt;marketing pack\n\nApologies for my ignorance, but what exactly is this? Can I just contact the agent to get ahold of it?", "replies": [{"id": "i82fld5", "text": "yes.  Generally if a buyer or another agent had interest in your property the first step is they call your agent or shoot him and email and he sends marketing materials which contain a bunch of info on your property, they use this to figure out if its worth a site visit or making an offer.\n\nBasically picture like the MLS sheets/pictures you'd get on a house, but in commercial its a pdf that is property specific and not from a system like that.", "replies": [{"id": "i82g4um", "text": "Gotcha, I'll get in contact with him and see what I can get!", "replies": [{"id": "i83chs6", "text": "Please send pm it to me as well. I have a wide network, and a gentleman looking in your state for land", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i82ovo9", "text": "First off, do you have it listed with a Commercial Agent? Residential agents are happy to take these listings but have no idea about environmental concerns or generally speaking, how to market these properties.", "replies": [{"id": "i82t4xe", "text": "Yep, we have a commerical agent. He seems to know what he's doing and has gotten quotes on removing the tanks. He seems to be on top of that side at least.", "replies": [{"id": "i82uxdw", "text": "Has the state Environmental Agency put a deadline on you to remove those tanks? If not, I\u2019d just put off the tank removal. Also, tanks are only a part of the ongoing environmental concern, but you don\u2019t have to remove the tanks to make it marketable. There will likely be ongoing ECs even after they\u2019re removed. Because I have not heard of that happening before.", "replies": [{"id": "i82vi2h", "text": "That was the plan but we just received a letter saying they want a project plan for their removal in the next 60 days. Thus our urgency :/", "replies": [{"id": "i82x3hq", "text": "Can you DM me the address. I maybe interested in purchasing it from you.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i82qr4g", "text": "There is a national fund that all gas stations pay into which is used for the removal/remediation of old tanks. I forget the name of the fund. You must submit an application for remediation and the costs of oil tank remediation will be payed for by the fund. I would recommend looking further into this.", "replies": [{"id": "i8405ii", "text": "Hi could you please provide further information?", "replies": [{"id": "i86kupx", "text": "Google exists. Quit wanting everything spoon fed to you with no effort on your part.", "replies": [{"id": "i86rkh5", "text": "Why the negativity? The man is just seeking help.", "replies": [{"id": "i86s88d", "text": "Probably bc they already stated they can\u2019t remember the name of it, and it looks like they gave all the info they had.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "i86v9mx", "text": "This is a nice thought and worth looking in to but in my decade plus in the environmental consulting industry I\u2019ve never seen a cleanup of an old gas station paid through a national or state fund. They do exist is some cases like for residential heating oil tanks, but the wait list to receive funds can be years. The property owner is almost always the responsible party and the state will require they remediate a site out of pocket, or through insurance coverage on the property.", "replies": [{"id": "i87th7h", "text": "It may be at the state level not national. I looked into it a bit further and yes there are 36 states that have funds available for this. The epa/dnr/whatever in those states forces all gas stations to pay into the fund which is used to remediate old tanks. I can\u2019t comment on the length of the application process but beggars can\u2019t be choosers.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i82rv2i", "text": "I sent you a message", "replies": [], "depth": 1}, {"id": "i82yv0m", "text": "food operator and Level 3 EV chargers", "replies": [], "depth": 1}, {"id": "i83dhcg", "text": "Ouch pulling out all that hazard waste now is going to be expensive.", "replies": [{"id": "i83dybm", "text": "I need to go double check in person but from what I know the tanks have been empty since the station shut down and were properly sealed.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i83e2do", "text": "I'm a single tenant net lease developer, among other types of development deals. Send me a DM with the info, especially the size of the lot. I'll take a look at it", "replies": [], "depth": 1}, {"id": "i840a3d", "text": "Can you Pm me some information? We have 3 gas stations and I could talk to you more about this", "replies": [], "depth": 1}, {"id": "i84enpc", "text": "Fill the tanks and make money. You could hire someone to run it for you or do it yourself.", "replies": [], "depth": 1}, {"id": "i84fihv", "text": "Why not convert the lot into an electric charge port spot? Aside from the initial investment, it basically runs itself.", "replies": [], "depth": 1}, {"id": "i84wqbv", "text": "I buy vacant gas stations. PM me. Thanks.", "replies": [], "depth": 1}, {"id": "i85rcap", "text": "Coffee shop. Park a food truck there and gauge interest.", "replies": [], "depth": 1}, {"id": "i86l9qs", "text": "I've seen cleared land in prime locations sit for decades because a gas station used to sit on them. The cost of removal and remediation is quite cost prohibitive. I hate to be a Debbie Downer, but that's likely why you're seeing no interest. Short of practically giving away the property for like $60k, you're in a tough spot.", "replies": [], "depth": 1}, {"id": "i86uj1p", "text": "I\u2019m an environmental consultant and do investigations and remediations on old gas stations sites on a regular basis. First and foremost you should make sure those tanks have been emptied of any product. That way, if they have any holes in them, they are not continually leaking gasoline or diesel into the ground. To do that you need to get a contractor out there with a vacuum truck. If the tanks didn\u2019t leak, you can probably get them removed for around $10-20k. I would highly recommend taking samples of the soil beneath the tanks once they are removed. The state will likely require that info as well, and if approved they will send a No Further Action (NFA) letter; you can show the clean post-excavation soil data and NFA letter to a future buyer to prove that there is no contamination. Hopefully they didn\u2019t, but if the tanks leaked and contaminated soil and groundwater, it could potentially cost hundreds of thousands to clean up, which is more than the property is worth and is often why you see old gas stations sitting undeveloped/vacant. Best of luck and hope everything is clean.", "replies": [{"id": "i86zxj4", "text": "In a situation where the tanks have leaked, and the property isn\u2019t really worthwhile anymore, can I just let the state take it or will I be liable to clean it up? I don\u2019t have anywhere near enough to pay for that.", "replies": [{"id": "i8cwu19", "text": "Not 100% sure on that, but if the property is owned by an LLC you may be able to have that LLC declare bankruptcy and walk from the site. A real estate attorney would be a good reference for something like that.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]