- Joined
- Oct 17, 2007
- Messages
- 295
I have a bit of a dilema and I could use some creative thinking.
I have an accepted offer on a large commercial building. The building has been in place for 30 years and has great long term tenants. It is in fanatastic condition and I am getting it at a significiant discount. I also have partners that would be willing to put up the cash down and they are able to qualify.
So where is my dilema you ask??
The problem is that 30 years ago there was a gas station on this lot. The tanks were removed but the guidelines back then are not nearly as tight as they are now. There was a Phase 2 study done and there is evidence of hydrocarbons on one of the boreholes. What this basically means is that a financial institution wont finance this property until it has a clean bill of health and the property is cleaned up. This would also mean that I would have to come up with the full amount to pay the seller directly. The tenants don`t care about any hydrocarbons, there is no health risk within the building, the building has been there 30 years without issue. This deal is too good to walk away from. It is showing a Cap Rate of 11% with the current purchase price. My partners are willing to put up the cash down but no more. The vendors are highly motivated but will most likely not take a VTB as they are old and want out.
Any creative ideas from you bright REIN members to make this work?
Mark T
I have an accepted offer on a large commercial building. The building has been in place for 30 years and has great long term tenants. It is in fanatastic condition and I am getting it at a significiant discount. I also have partners that would be willing to put up the cash down and they are able to qualify.
So where is my dilema you ask??
The problem is that 30 years ago there was a gas station on this lot. The tanks were removed but the guidelines back then are not nearly as tight as they are now. There was a Phase 2 study done and there is evidence of hydrocarbons on one of the boreholes. What this basically means is that a financial institution wont finance this property until it has a clean bill of health and the property is cleaned up. This would also mean that I would have to come up with the full amount to pay the seller directly. The tenants don`t care about any hydrocarbons, there is no health risk within the building, the building has been there 30 years without issue. This deal is too good to walk away from. It is showing a Cap Rate of 11% with the current purchase price. My partners are willing to put up the cash down but no more. The vendors are highly motivated but will most likely not take a VTB as they are old and want out.
Any creative ideas from you bright REIN members to make this work?
Mark T