High Volume Gas Station Financing How To

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Me and my partners are working on finalizing a deal with exxon for a gas station which pumps around 250k gal of gas a month it has a convineince store which does almost a mil in sales. Gas station makes a net profit of 377k a year. Acquisition is for mid 400k . The number looks great but here is the tough part that exxon have lease which is renewable after every three years base on performance of the business. Exxon own the property and the gas we are only paying for goodwill that is why most investor are reluctant to invest. our partnership have 17 years of gas station management experience and can handle such an acquisition easily, we have the man power available to make this station more profitable. Can you suggest any place where i can acquire financing and how should we present this deal to the funding company.

Comments(7)

  • SethTM10th May, 2006

    Why would everyone be getting out of the gas business?

    And you said most shells an exxons loose money due to being higher priced? Where do you get your data for that? I would think a higher margin and a set clientel base would mean the opposite.

    [ Edited by SethTM on Date 05/10/2006 ]

  • roberth15th June, 2006

    Quote:
    On 2006-05-10 08:09, eseller01 wrote:
    Me and my partners are working on finalizing a deal with exxon for a gas station which pumps around 250k gal of gas a month it has a convineince store which does almost a mil in sales. Gas station makes a net profit of 377k a year. Acquisition is for mid 400k . The number looks great but here is the tough part that exxon have lease which is renewable after every three years base on performance of the business. Exxon own the property and the gas we are only paying for goodwill that is why most investor are reluctant to invest. our partnership have 17 years of gas station management experience and can handle such an acquisition easily, we have the man power available to make this station more profitable. Can you suggest any place where i can acquire financing and how should we present this deal to the funding company.


    Financing for gas stations are done by very few lenders and the balloon on the loan will be determined by the length of the lease. So if there is only two yrs left then only a two yr loan. The best you can hope for is a new lease for 20 yrs with 4-5 5yr options behind the original lease. The fact that you have a major investment grade company backing the lease is a huge advantage in getting a loan but even smaller dealers there can still be 90% LTV if you have the experience and net worth to qualify for the loan.
    Good Luck,
    Robert
    [addsig]

  • Cheri56211th January, 2007

    The building is owned free and clear.

  • Cheri56214th January, 2007

    Thanks, YPOChris for the information.

  • ramawalk115th January, 2007

    Hi,

    I lived in Seaside when I went to DLI and lived on old Fort Ord in 2000-2001................beautiful area.

    I am a general contractor. A credit partner in my realm would secure a loan for the construction of a home and act as passive investor (fund the deal and help with major decision making). As the GC, I would manage all of the construction and make sure the project gets done on time and within budget.

    Then, once the house sells, profits are split 50/50.

    Hope this helps.

  • UmanSoul3rd January, 2007

    finniganps:

    Yes, the commercial market is definitely appreciating here in South OC. You are correct in regards to the residential market. This particular property is in a very HOT location, we have a very experienced commercial appraiser provide us with the market evaluation. Excellent building (no Mello Roos taxes) and excellent location.

  • commercialking27th January, 2007

    So what is the post-leaseup cap rate?

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