[deleted by user]
[removed]
[{"id": "hemqpl2", "text": "Just make sure you get a Phase 1 and potentially a Phase 2. That would be my only main concern.", "replies": [{"id": "hemrxe6", "text": "Might you be able to take the time to elaborate?", "replies": [{"id": "hems4kp", "text": "Get an environmental test to check for oil on the property or in the ground.\n\nBank likely won\u2019t finance it without it if you go that route.", "replies": [{"id": "hemsthy", "text": "Do you have any reference points or additional information on financing requirements for an environmental test?\n\nWe'd be using an SBA loan.\n\nI'm trying to evaluate this opportunity to see if it's worth my time and money (as well as my broker's time) to do any due diligence on this property.\n\nThe seller's broker has 0 reports available.\n\nIt's being marketed as a redevelopment opportunity for a 15 to 18 unit multi-family.", "replies": [], "depth": 4}], "depth": 3}, {"id": "hems7s9", "text": "Those are environmental reports. An industrial properties could have enviro hazards that could be very expensive to remediate.", "replies": [{"id": "hemswd3", "text": "Is the seller's broker required to produce the reports, or would that be the buyer(my) responsibility?", "replies": [{"id": "hemus31", "text": "You should request them as part of an offer. A good seller would have the prepared ahead of time or otherwise you should request it as part of your due diligence. I would never recommend the buyer pay for one except under specific circumstances (ie. unsolicited offer, you're desperate to have one). In my market a Phase 1 costs $3k usually.", "replies": [], "depth": 5}, {"id": "henacrk", "text": "To add - Most lenders will require a phase I report to be dated within 6 months of the loan application. After this point, the vendor who completed the phase I no longer covers the report with their insurance.", "replies": [], "depth": 5}, {"id": "hep8qhq", "text": "You're not ready to buy this property.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "heose04", "text": "You need to hire an environmental consultant to do a phase 1.\n\nEnquire with the broker to ask if a phase 2 has been completed.\n\nEnvironmental encumbrances can mean that development permits or even simpler building permits can be out of reach until the issue is cured.\n\nEnvironmental contaminants can also be harmful for inhabitants, and can flow to neighboring property. This over means you could be liable as the landowner.\n\nBecause of the above, many investors won't buy property with environmental risk attached. For others, there may be a business case to get a property at a discount or with a subject to successful development permits application.\n\nAt this point make sure that the residential can continue to be occupied, and that the second floor you want to add will be a legally permissible.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hemr9y7", "text": "Will you have a lender? They will be a lot more conservative than you could be. \n\nWas it ever used as a gas station? uSTs are a pain but can be handled with enough $$$", "replies": [{"id": "hemrzks", "text": "SBA Loan.\n\nNo gas station.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hemrgz1", "text": "I'd be slightly concerned about environmental issues:: paint, solvents, etc.", "replies": [{"id": "hemrybn", "text": "Might you be able to take the time to elaborate on your comment?", "replies": [{"id": "hen1966", "text": "As others have said, get environmental testing done. I'd want the seller to mitigate any issues known or discovered, but I'm not familiar enough with auto-related properties to know if that's how it's done.", "replies": [], "depth": 3}, {"id": "heodl61", "text": "Here\u2019s a good article to read: https://www.hanisconsulting.com/blogs/post/breaking-down-environmental-liability", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hemt0z3", "text": "Actually do have some background as a buyer of body shops. As someone before mentioned. Get a phase 1 environmental, possibly a phase 2 as well. Other than that do you have any particular concerns? The broker may be tight lipped because the tenant doesn\u2019t know it\u2019s being sold unless they\u2019re an owner/user. Make sure they don\u2019t intend to leave any hazards or scrap behind as that can be a pain to deal with.", "replies": [{"id": "hemtkas", "text": "Would getting the phase 1 and 2 be on me? (My time/money?)\n\nSeller's broker has 0 reporting/reports.\n\nThe seller's broker has 0 reporting/reports. moving out of state.", "replies": [{"id": "heoe0c3", "text": "What I typically see is that the buyer pays for the Phase I and if a Phase II is necessary, who pays the cost is negotiated. It also very important that all the \u201call appropriate inquiry\u201d steps are completed to get the liability protections.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hen28ik", "text": "Hire an Environmental Engineer to do a Phase 2 Environmental report not he property. The Phase one will involve a physical inspection and review of paperwork filed with jurisdiction related to underground tanks and previous uses. The Phase 2 is usually triggered if there is something in the Phase 1 that shows there *might* be something present in the soil. The Phase 2 includes bore drilling and physical testing of materials at off site facility for foreign substances. Any lender will require this and if you cannot pay out of pocket it will be added to the closing costs and will be on the settlement sheet.", "replies": [], "depth": 1}, {"id": "hen2jp9", "text": "The reason for the environmental is that most auto shops have some sort of car lift to raise cars off the ground.  If the shop had or has an \"in-ground\" lift it will have an underground fluid storage that's used to raise and lower the lift.  Older lifts have a tendency to leak fluid into the ground.  Those are actually not hard to remediate - the environmental guys have a much harder time with parts washers.  The solvents used to wash engine or body parts can spread a lot further into the ground water than hydraulic fluid does apparently.", "replies": [], "depth": 1}, {"id": "heprgbs", "text": "One way of eliminating this property from further consideration, although by no means comprehensive, is to start with some of the tools provided by the EPA. Superfund sites would be obvious so I'd start with \"cleanup\" sites. Again, not even close to a Phase I &amp; II as any issue would have to have been reported but it's a place to start especially if an auto shop has been operating there for a long time. If you are working with a trusted lender have they provided any thoughts on SBA viability for the specific deal?", "replies": [], "depth": 1}, {"id": "heqff0d", "text": "As others have said get an environmental test. \n\nI\u2019ve heard horror stories about shops being handed down from father to son just to have an oil clean up cost 6 figures and put the business under.", "replies": [], "depth": 1}]