Help with building value

[thomascreation]

Put in a verbal offer today. Expecting a call back tomorrow. Keep in mind he is taking offers and has no asking price. I went in with 1/3 of what the city has it valued at or an option to rent for $300 a month. Thats on the low end and almost crazy low but he seemed ok with it and wanted to talk it over with his father.

 

[thomascreation]

After the offer he came back at $20k and I pay this years tax. I countered with a 12 month lease cash up front with an option to buy for 20k at the end of the lease. He said he would pass. He may be playing games hoping I'll come up. As of now I don’t think its going to work out. I may call back in a month or two and see if he’s re considered. 20k is still less than 1/2 city assessed value but I decided I would like to lease it so I can buy time to see how it works out for me and to check into any contamination issues that may be present.

 

[cdseven95]

No such thing as a 20k building around here... A 20x10 garage stall is $700+ a month to rent


But I have a friend that bought a building that was once a gas station.. The fuel tanks leaked and contaminated the soil. Same with the old in ground lifts.

He bought it with this knowledge and had to accept the clean up costs..

They dug 60 wells on the property for testing... He bought all the equipment himself to clean it up... He has a room full of pumps and 55 gallon drums.. He pumps a ?bacteria? into the wells that converts to current contamination to a different compound?. He has been doing this for years. Once it is diluted to a certain level the deed is clear.

The property was 700k and he has about 400k into the cleanup with him doing it himself.. (Basically no one does this by themselves..) He needs to pay for the periodically testing and an outside company to dig new wells on his property and also test surrounding properties.

 

[dlenkewich]

After the offer he came back at $20k and I pay this years tax. I countered with a 12 month lease cash up front with an option to buy for 20k at the end of the lease. He said he would pass. He may be playing games hoping I'll come up. As of now I don’t think its going to work out. I may call back in a month or two and see if he’s re considered. 20k is still less than 1/2 city assessed value but I decided I would like to lease it so I can buy time to see how it works out for me and to check into any contamination issues that may be present.

Personally, if your serious - put in an offer pending due diligience.

Take your 10 days(or whatever) collect all the info you need for the contamination possibilities and figure out if you want the property or not.

At worst, it sounds like you have the cash to sit on the property. If you don't end up liking it then sit on it until the market rebounds.

$20k for a shop and commercial land is pennies.

 

[nehog]

Another article in today's local paper lists another problem site in the state which was going to auction. Auction was pulled, because of concerns of possible pollution. Guess what one of the units in the building was? Yep, a cleaning establishment...

I wonder if it is possible to get insurance to cover any liability for cleanup when (not if, but when) it becomes a problem? That might solve the problem.

As to the concept of 'lease with an option to buy in a year...', personally I'm a bit leery of this in the current scenario. Too many unknowns, unless you have a use for the building that can be discontinued in a year, or easily be moved.

Just my $0.02 worth, which is probably not worth two cents either!