Looking to buy commercial property- auto body shop
Hi all! First time home buyer, and I am looking to purchase a property that is a package deal. On one lot is a single family Home and next door is Auto body shop. I have been told I need to conduct environmental testing (phase 1 and so fourth depending on that the finds are). The person I spoke to was very helpful and honest and told me it’ll run me in the teens of thousands for the testing and licensing transfer to be complete. 
Any advice from anyone whose been through the environmental testing process before? Any questions I should be asking listing agent, seller, inspectors? Thanks!
[{"id": "i05m5y0", "text": "Per your post you're seeking to purchase an existing building that is operating (or has operated) as an auto body shop.  Included in the building is a residential area.  Or, are you seeking to purchase any building to use for an auto body and residential space?", "replies": [{"id": "i05o9gn", "text": "Two properties being sold in package deal. 1 lot is a home and second lot (next door) is an existing body shop", "replies": [{"id": "i09hu0p", "text": "If it's an existing body shop the lender will require a phase one study at the minimum (for the auto body property).  Depending on what type of work was done in the building they may require a phase 2.\n\nI own several prior gas station/auto repair properties in DC.  When they were converted into another use there was significant studies required.  I've also acquired a day care building adjacent from a gas station and the lender required a phase one.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i05mhsp", "text": "You want a Home AND a Body Shop? In one place? Do you already have a site in mind? This seems super specific. \n\nI buy existing body shops. You should absolutely do a Phase 1 Environmental and depending on the results possibly a phase 2. While the modern multi-location shops are pretty damn clean a more traditional \"Mom &amp; Pop\" shop may have not been so clean, and this is a profession filled with nasty chemicals. You don't want to be responsible for their old mess.", "replies": [{"id": "i05o03x", "text": "So it\u2019s two properties being sold together", "replies": [], "depth": 2}], "depth": 1}, {"id": "i05qycr", "text": "If it\u2019s near 80903 don\u2019t buy it", "replies": [], "depth": 1}, {"id": "i05stj4", "text": "Is this a leaseback situation or are you buying the business as well?", "replies": [{"id": "i05tcrg", "text": "Buying the business and would lease the auto body to a new tenant", "replies": [{"id": "i060w6n", "text": "So your buying all of the equipment  and then leasing that equipment to a tenant that you need to find?\nDoes the business have any active contracts?\nWill the employees stay? Will you run the business until someone wants to buy it and pay you a lease rate that\u2019s acceptable?", "replies": [], "depth": 3}, {"id": "i061l8a", "text": "If you\u2019re not in the auto body business and planning to operate it yourself I wouldn\u2019t get involved. Body shops are the worst tenants. Even if the proper is environmentally clean now it would be difficult to ensure it stays that way if you\u2019re not running the business. To answer your original question with a body shop you will probably need Phase 1 and depending what they come up with more then likely you will need some Phase 2 sampling. The real expense comes in if there\u2019s remediation that needs to be done at which time it would be a negotiation with the seller to reduce cost of remediation or walk away from the deal. Many lenders will not want to finance body shop and even if seller holds a mortgage your still in a position where you may not be able to refinance and/or sell the property down the line to a buyer who\u2019s using bank financing. If I weee you and looking for a live work deal I would look for a small mixed use building with retail on ground floor and apartments above and I would live on the apartment.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i06m29k", "text": "I have a pocket deal like that but has a mobile home double wide on it and a building Two bay shop, rental income is $2700.00 per month and shop not rented right now. Wimauma Fl $450k. I am a licensed realtor.", "replies": [], "depth": 1}, {"id": "i079vta", "text": "San Diego?", "replies": [], "depth": 1}, {"id": "i0i2595", "text": "Environmental scientist here. We did about 1500 environmental projects that you speak of last year. On track to double that this year.\n\nThe thing you are talking about is a **Phase I Environmental Site Assessment.** They are the cheeseburger of the environmental consulting world. \n\nI wrote a [**big long thing for you here**](https://a3e.com/8-tips-to-buy-phase-1-esas-like-a-hero/) about how to order Phase I ESAs like you know what you are doing. BTW, if you click through the link and decide to call us for more information, my extension is 120.\n\nBut if you don't want to talk here's my best advice. \n\n1. Don't become emotionally attached to any one property. Emotion makes you do stupid things.\n2. 90% of all gas stations and former gas stations are \"leakers\" or have leaked in the past. It's a serious environmental problem.\n3. Autobody shops often occupy former gas stations where the pumps have been removed. Be on the lookout for such situations.\n4. Hydraulic Car Lifts with the single post in the center, depending on the age are notorious leakers. Worse still, they leak under hydraulic pressure meaning the oil gets injected under the building.\n5. True autobody shops that don't involve gas stations, or engine / transmission work can be located anywhere and are often found in the warehouse district around the city you live in. Warehouse space is easy in, easy out from a rental standpoint and generally cheap. You may find renting space and buying a house an easy driving distance is a better choice from an overhead standpoint. \n6. DO NOT PAY FOR THE PHASE I ESA, MAKE THE SELLER PAY FOR IT. I can't stress this hard enough. If the seller won't pay, walk away. A Phase I ESA is $2000 ish depending on building size and location. These deals blow up all the time before they go to closing. If you spend the $2000 and the deal blows up, you are out the $2000 with no building to show for it. Make the seller pay, or make them pay and then pay them back at the closing table. If you don't get to the closing table, you don't pay.\n7. Phase II ESA or Phase 2 ESA for those who prefer numbers to roman numerals are expensive and you haven't even purchased the building yet. Figure about $6000 for a phase 2 in the event you need one. You may not. If the Phase I comes back clean, you're done. If it comes back with REC's (recognized environmental conditions) you're on to a Phase II ESA. If you took my advice and made the seller pay for the Phase I ESA, the seller is in a bad position if he wants to sell. He needs to pay for the Phase II ESA as well and it needs to come back clean.\n8. If the Phase II ESA comes back as contaminated, you are on to \"remediation\" which is a whole ball-o-wax. What you need to get at that point is a \"NFR\" or \"NFA\" depending on the state you are living in. NFR - No Further Remediation, NFA - No Further Action, they are the same thing by different names. Figure a cost for an NFR at $25,000.\n9. All of this can be done, and done like a rockstar provided you never get emotional about the property you want to buy. It's when you \"gotta have THIS property\" that you make mistakes and have \"ragret\".\n\nIf you need to borrow money, the bank will make you do all the due diligence you need to do. Not because they are really nice, but because they want to make sure they will get their money back as you pay the loan. If you are buying it for cash, you need to have the brains to do ALL the due diligence yourself and not cut corners. This is serious business and if you get into real trouble anything you buy could be worth $100,000 less instantly. I know of properties that are worth zero dollars and have been for 40 years because they are so monumentally effed up underground that nobody will touch them with a 10 foot pole. These are sites in major cities and suburbs which when you look at you think, why isn't there a building there?\n\nI just ran out of coffee. Call me Monday if you want to talk. Talk is free.", "replies": [], "depth": 1}]