How to Find the Right Gas Station Business to Buy or Lease

If you are new to gas Station business but have enough interest to dig dipper into this business, than next step for you is to try and find a few businesses for sale and evaluate them the best way possible and see if any of them fit your budget and need.

As I mentioned before, a gas station business is truly a recession proof business and still provides a comfortable living for a family. not to mention the freedom it provides by having and owing your own business.

If you are serious about finding a suitable gas station business to buy or lease, there are many ways to find gas stations, convenience stores that are for sale in your area.

You can try both Online and Offline ways.

5 Offline ways to Find Gas Station Business for Sale

You can contact

1. Through Local business brokers (Some national and some local, two of the major national brokerage companies are Sunbelt and Nationwide business brokers, local or statewide would like Gas Station USA brokers in FL)
2. through Local commercial real estate agents
3. through Local newspaper classified
4. through Local oil and fuel Jobbers/wholesaler
5. Through Vendors (this works only if you are already in this line of business)

Now let’s talk about the ways you can find businesses for sale online.

5 Online Ways to Find Gas Station Business for Sale

There are some very reputable websites you can go and check for sale listings; then there are also online auction houses that sell gas stations among other businesses.

1. First check out bizbuysell.com, this is the site similar to realtor.com for home real estate, in this site business brokers list their businesses that are for sale.
2. Try searching on NRC.com. NRC is a big player when it comes to online business brokerage. They mostly deal with big corporations that owns hundreds of stores. You will find both “for sale stores” and “for Lease stores”.
3. Craigslist ads yes you can find them under “business for sale.”
4. Do a search for auction house that sells commercial properties
5. You can also just do a Google search by typing “gas station for sale in Los Angeles, Ca” Just mention your city and state and see what comes up.

But before you contact any of the sellers or brokers, you need to have your game plan set, so you don’t sound like you are just browsing the market, business brokers are very different than typical home real estate agents, if a broker sense that you are not serious they may not even disclose some of their prime listings to you, the reason is simple, they don’t want to take a buyer who is not serious to a seller who is motivated to sell, this can take away from the broker’s credibility in front of the seller. Also sellers typically only want serious and qualified and ready buyers.

You will notice before a broker discloses any information about a business they want you to sign a document call NDA(Non-Disclosure Agreement)this is required because you are being exposed to some private and sensitive financial information about a business. Once you sign the NDA you are in a contract that says you are not to disclose the information you are about to receive with just anyone.

Also another thing to keep in mind when visiting any of the potential stores for sale that most times the business owners do not want the employees to know that they are selling the business. Sometimes there is a good reason for it. So first sit down figure out what is your budget, what is your game plan, and how soon do you want to get into a business. Once you know these three, you are half way there.

Just remember when you contact a business broker, they may ask you a lot of questions to figure out what you are exactly looking for. They may ask what your budget is, it is usually a good idea not to answer that with a dollar figure, instead say it varies depending own what is out there. This way they will show you a wide range of businesses some that may be over your budget and some below your range too but this way you can see where the market stands. It gives you a baseline of the highs and the lows of your market.

Now let’s talk about leasing vs. buying, if you are limited on funds, then leasing may be the option for you. But remember it is hard to find a store to lease with no money down, so you may be better off looking to buy something than to lease.

If you have access to credit( when I say access I mean you have good credit, great tax returns for last 3 years showing decent income and some down payment

If you have the budget and means for it then my advice is always to go for buying the business including R/E, there are quite a few benefit to doing that.

First, you are creating an asset, well yes it is an asset that makes your net worth look higher than before. Not only that most commercial loans are typically anywhere from 7-15 years term so in 15 years you pay off the loan and then you are sitting on a paid off income generating property that is making money for you every month.

Second, there are few tax advantages to buying VS leasing. Your interest cost goes as expenses then all your equipment that came with the store including gasoline pumps to register and tanks, all of these can be depreciated in your books for certain number of years which is a big savings in actual dollars.

Typically If you buy a store, your monthly note payments is lower than if you actually leased that same store, this is how it works usually

Let’s say a gas station is valued at 800k, if you lease that store, your typical rent will be at 1% of the total investment cost, which is 8K /mo, then you have to pay for T&I (Tax & Insurance)

On the other hand if you bought that same with 20% down, at 6% APR financed for 15 years your typical note payment will be around $5400 plus T&I, not to mention all the tax benefits you get from buying which adds to your bottom line at the end of each tax year.

As you can see, there is about 3k difference in just monthly payments, not to mention if you lease that same property you might have paid 100k goodwill just to get into it. Where if you buy the property whatever down payment you pay comes off the total price of the property, so you are gaining instant equity on the business property

Once you have a list of 3-4 businesses to look at it, that is when your real work starts, first you need to visit all the locations inspect then have a visual feel of all the locations, take plenty of notes, best is to take notes where you write down the good the bad on each side so later you can see what are good points and what are the bad points of a business and if the bad out weights the goods. You can also use a marketing tool I often use call MA-CP grid. Where I draw a square box with 4 mini square equal square in that big box and on the left of this box I write MA which stands for market attractiveness and on the bottom I write CP or competitive positioning, then I try to place each of the business in one of those squares based on their location, sales, nearest competitors and etc. You can take a look at a MA-CP grid by going to the Resource tab from the menu bar.

Once you narrow down let’s say 2-3 stores out the 5, time to tell your broker or seller that you are interested in finding out more about this business.

If you come this far then you are well on your way to be a business owner soon, but before you jump remember, once you narrow down to a handful stores, time to do a thorough due diligence on each of your findings. Once you do a good and thorough work, the right one will come out of that bunch and you will know which is the right one for you to make an offer on.

Go to my other blog post where I talked about how to do a proper and thorough due diligence. Don’t forget to subscribe to my newsletter so you can stay up to date on all the upcoming news and changes in this business not to mention you will receive a few very valuable tools that will help you run your business more efficiently, and it is all free.