Need advise on commercial investment property.
Hi All,

I need advise regarding a commercial property (land only no buildings yet) about 20000SF. Price is good and location is very good (right next to a major Freeway). However the land is next to a bayou (water channel) and is in a flood zone. I'm planning to rent the land to any business willing to pay rent. It would be perfect for any fast food chain, tire shop or mechanical shop. 

Would the flooding zone scare away future tenants ? Would this be deal braker for any of the big fast food chains? Does anybody know the policy regarding land rentals of the big chains ?

Thanks 
[{"id": "c8dlz56", "text": "This could be a big issue. I can't speak about the policy of big chain stores, but if the land is in a 100 year floodplain, it can be more expensive or impossible to get insurance. Lenders may require special additional insurance before financing the property. Another potential issue is if the land does not hook up to city water / sewer, will the land support a well and/or perc test for draining of wastewater? All questions I would ask if considering this property.", "replies": [], "depth": 1}, {"id": "c8dqqem", "text": "Price is good for a reason. Do your due dililgence and check insurance rates. Higher expenses = lower property list prices.", "replies": [], "depth": 1}, {"id": "c8dtg68", "text": "You are not going to get any fast food chains on a lot that is only 20,000sf.  A Waffle House needs at least 3/4 an acre, and all the majors need 1+ac.", "replies": [], "depth": 1}, {"id": "c8dupcc", "text": "You should take a look at other businesses operating in the area and the local population. Institutional fast food users will look at the population demographics, but the most important consideration for YOU is going to be the cost of insurance since it sounds like it will be a large cost and factor heavily into your net operating income. The NOI is the magic number for you as an investor.", "replies": [], "depth": 1}, {"id": "c8dv4jr", "text": "We have the same issue here in my town.  A 330k sqft industrial building that is in the flood plain.  (Even w/ an elevation certificate that the BUILDING is out of the flood plain, and only the land is in the water area).\n\n\nSome companies I've had look @ it won't even touch it due to the flood.  Some CAN'T - (government type stuff), and I'm glad I don't own it (but getting close to a deal on it!)", "replies": [], "depth": 1}, {"id": "c8e10zg", "text": "Thanks for the replies. \n\nHere is my plan:\n\n1. Get insurance quote for the land with an 4000SF building on it ( I guess a mechanical shop). Currently, there is no building and due to paying cash for the land I don't need insurance till improvements are done to the land.\n\n2. Check if we can tie to the city sewer and water supply. I guess this will not be a problem there are businesses on two sides (Motel and auto parts store). \n\n3. I look on google maps and there are a lot of businesses with buildings in the flood zone so it must not be a huge deal. However, need to crunch all the number and make sure it is a good deal. \n\nThanks again   ", "replies": [], "depth": 1}, {"id": "c8mc4gd", "text": "Are you trying to do build to suit? Or are you just going to sit on this until you get an offer?", "replies": [], "depth": 1}]