Determining value for convenience store

Ok so I found a person who is retiring and wants to sell his convenience store. I don’t have much info as of yet but want to get some direction here.

  • Asking: 70k + inventory
  • Gets 30k+/month
  • Average profit 5-6k
  • Hours are 9am - 8pm, closed sunday
  • It’s in an industrial area
  • They sell beer/wine, check cashing, atm
  • There is hardly anything around as far as businesses go other than industrial.

How can I find out the market value of this place and determine an offer price, etc…?

I do work full time so I would need to find someone to work there. I do have a cousin with some convenience stores and he could assist as far as questions I have. What he does is offer a percentage of profit to a helper he trusts that then manages / works in the place.

Any advice, suggestions?

The value of commercial property is mainly based on the present value of the cash flows. With the amount of income that you are reporting and other factors, your best bet is to hire a cpa to give it a value. I would also speak with a commerical realtor and lender as well.

The hard part about commercial real estate is that you have to spend a lot more money in upfront costs before you buy to make sure that it or isnt a deal. No way to recoup that money unless you get the seller to pay for the expenses with an independent party.

Good luck

Annual income should matter too… I read somewhere that businesses should be sold below its annual income.