Problems in owning your own building

[dafly]

I was currently looking into purchasing a building to operate a outdoor sporting goods store. The problem we ran into came from the environmental testing. The building use to be a Service Station many many years ago with a potential hoist being buried in the concrete. The attorney handling the real-estate transaction closed out the contract without my consent went AWAL after the Phase 1 test discovered these REC’s which I told him would come into play before we spent this money. Now after all this, I ended up learning a few things on EPA, property, and Enviromental REC’s.

The property wouldn’t be able to be turned back into a repair shop as theirs one right by the building and is a small town. Plus think their would be major issues with even getting approval from the township. The building simply inst setup to be a repair shop anymore. It’s been changed too drastically.

I originally wanted to own my own repair shop. However, do to my finances this is probably out of the question, but maybe still possible just not to the capacity I wanted, or maybe at least a detail shop.

How are you guys dealing with the environmental issues in purchasing a building? Older buildings would already have REC’s such at possible UST’s, LUST’s, ground contaminations, and so forth. Not to mention even doing a BEA, surly this line of work would only cause failures to prevent making the situation worse, or am I wrong here?

Plus if you were to by a clean property with no REC’s, what to do when selling the property? Seems to me that the property would need cleaned up before it could be sold.

I am now scared to even want to open a shop after this whole ordeal after this mess with our attorney.

Paying for Phase 1 after Phase 1 to find a property is insane. You then are looking at a Phase 2 and cleanup costs associated. I really do not know How anyone is buying commercial property anymore, not alone for a repair shop. I’m sure the attorney has really got me filled with so much wrong and inaccurate information and really need someone in the industry to clear the air here for me, regardless if we can get negotiations opened back up for this property and do the sports store, open a repair shop, or open a detail shop.

[xrac]

This is a big issues. There are several things you can do to help yourself. First, learn to identify potential environmental issues: USTS, asbestos, underground lifts, surface staining, drum storage, etc. Second, find an environmental consultant that you can trust. They are out there just like good shops. Third, become very familiar with your city's zoning. Zoning can make or break a deal. It has for me. If you have any specific questions PM me your phone number and I will call you. I worked as an environmental consultant doing Phase 1 & 2, permits, and remediation for 10 plus years.

[ScottyP]

Maybe this varies by region, because a building behind from mine sold a couple months ago. It was originally a gas/service station and that was maybe 40 years ago and prior. Then it was a muffler and brake shop until it sold. Now it's going to be a farmers market, whole foods type of store, just like that! That's quite a change and there was no enviromental work or studies done at all. They got in a little heat for not pulling permits and changing zoning usage, but that seemed to clear up quick and they are back working on it.

[xrac]

This thing can depend upon who the buyer is and whether there is a commercial bank involved or not. If the buyer is willing to assume liability and has the cash to purchase a property then there is no law that requires that any environmental study or Phase One be completed. The same is true if there is owner financing then they could get by without anything. If a commercial bank is involved they will probably require something. They do not want to be involved in lending on a deal where the environmental liabilities lessen the value of their equity or that saddles the owner they are lending to with unanticipated expenses. The rural and small banks are more casual about this than the bigger banks.