Need Advice!

[Fatboy769]

I have a 5 & 1 located on an acre corner lot right off the interstate. A developement group has purchased 19 acres behind my wash, with approved plans to build an elaborate travel center. I have been approached about selling my lot to them, with me being able to continue running my wash for a minimum of 2 years. After that time, it would be on a month to month basis and the lease would be a $1 a month for however long it may be. At the end of our agreement, I can remove all equipment from the property and use in another wash or sale for what I can get out of it. My question is, how do you determine a $ figure, based on this scenario? Thanks in advanced for any information!

Scott

 

[Patrick H. Crowe]

I'd determine the Fair Market Value of your wash. Once you know the FMV you need to determine what sort of a premium you could expect from a buyer who approached you wanting to use the land for other purposes. That's a somewhat tricky and personal call.
It has to depend somewhat on what the potential buyer paid for the adjacent land and how critical your piece is to the success of their project.

Next I'd calculate what you'll make in the two years (could be very little, could be a ton) but you can use the last few years of income to tell you that.

Finally, do not expect to get much for the used equipment. If your place is current making you a ton then go high on the price. If you'd experience some relief to be rid of it then that's another story altogether.

Very interesting situation. Good luck.

Patrick H. Crowe

 

[Fatboy769]

Pat, thanks for the information. We'll see what happens, as the talks progress. It definately makes it easier, knowing that you don't have to sell it.