Flipping Gas Stations To Buy Porsche 911's

Welcome back Gas Nation, this time to Episode 7 of GBG TV!

The past few weeks have been super busy! Less time for GBG online and more time in the trenches, working on these 5 GBG 911 challenge stores and hauling fuel!

If you're new here: the BGB 911 challenge is my personal project & challenge of buying 5 old gas stations or gas station sites and fixing and flipping them to make enough profit to buy my dream car - a Porsche 911.

Every week I try to update the Gas Nation on how things are progressing!

This week we're going to focus on store number 5! But before we get into that, what we'll do is name these stores properly. One of my great Twitter followers suggested that I call the stores something other than #1, #2 and so on, so we're doing that in this week's episode. Thanks a lot for suggesting this. It's a great idea.

The first site we'll call Magic Market, because that's what it was called many years ago before it was bought out of a messy situation and because that store is performing with a tenant today and that's always a good thing.

Site number 2 is the one with the massive sinkhole. I’m sure you all remember that mess. So that one is going to be known from now on as The Abyss. More on this one next week. It's a fun - and crazy - one.

Number 3 will be called The Rent Is Too Damn High. That's the three-bay repair shop where the tenant left in the middle of the night when we talked about future rent.

Site number 4 is the one that burned down to the ground (check out the video for a picture) without any insurance on it so the previous owners didn't rebuild. This one will be called Allstate. I won't be taking any further questions at this time.

Alright, we can talk about our store of the week, store #5, which, because it looks like a building straight out of a horror movie, we'll call Amityville. If you haven't seen this horror movie make sure to check it out this weekend. This one will have to be razed and rebuilt almost from scratch.

With Amityville I wanted to go really professional so I ordered a feasibility study for the location to go over traffic and revenue projections and all the other things that are really important to making a location a success.

The company that did the study came up with these 2 key numbers:
1. $100k of inside sales per month, on which I'll have a 30% gross margin, so $30k in gross margin from selling things inside the store. Inside sales don't include lottery sales or ATM commissions.
2. We'll make 20 cents a gallon on the mix of our 3 fuel types by selling 84,000 gallons at this location a month so that's a bit north of $16k on fuel sales.

So we're generating $46,000 in gross revenue. That’s not a ton and the access from a road divided by a median isn't ideal (this is a mid-block location), but I like this location because… we're the only gas station within a 5-mile radius. That's right, there's no one within a 5-minute drive, maybe a little more, of this store. We love to see that captive audience!

I also really like it because there's a lot of truck traffic here and that means drivers who spend a lot of money on the high-margin goods I like to sell like energy drinks, vapes, and tobacco.

We like these consumers and this location, far away from any other store.

When we bought our Amityville gas station, I had an environmental study done on this one - many of you will remember Phase I and Phase II reports which I went over in last week's episode - and they found a little bit of contamination which we took care of and now we hold a No Further Action Letter from the EPA, which means that we've done what they asked us to do and they're not going to take any further action in our case. This is a powerful document to hold and it's already helping us market this property - as you'll see below.

So now I hold 2 really valuable documents - the No Further Action Letter and the Feasibility Study. Both of these are already helping to move this place.

So now that I can sell the land, I listed it with a broker and… the phone blew up. We got 2 bona fide offers. The first one was full price, the second was $30k under asking. The problem with the full-offer guy was that he not only needs a construction loan, but it was clear to me when I spoke to him that he wasn't aware of how much construction costs these days and this just wasn't going to work out.

So my real estate agent went back to the second guy who bid under asking and got him to come up to the asking price. This buyer also needs a loan, but I like my chances with him a lot more. This is an experienced buyer who already put up the earnest money I asked for. He knows what it costs to build a store. We're supposed to close in 2 months. While technically this has a 50:50 chance of closing, I like my chances because he's far more knowledgeable and experienced.

Alright guys, we really got into the weeds this week and went over traffic volumes and fuel sales and gross margins. I hope you enjoyed this week's video and this week's newsletter. Make sure to watch our past episodes and to share the Gas Nation with your friends and family - both those interested in the gas station business, but also those who want to peek behind the curtain to learn how these places that we visit every week, if not every day, work.

Till next week!

GBG