What to check before buying a gas station in Texas: a 10-point checklist

A gas station is two purchases in one: a piece of real estate with underground tanks, and an operating business. Most deals that go wrong do so on a handful of questions that could have been answered early. Here are the ten we check first, in the order we would check them.

1. Is the parcel the property you think it is?

Start with the county appraisal district. Find the account for the address and confirm the owner, the legal description and the land area. A listing address does not always match the account: corner stations often carry two parcels, and rural highway addresses can sit hundreds of feet from where a map pin lands. If the listing says 1.2 acres and the appraisal roll says 0.9, find out why before anything else.

2. What does the state know about the tanks?

The Texas Commission on Environmental Quality (TCEQ) keeps the registry of petroleum storage tanks and the list of leaking-tank cases. Look up both for the address and for neighbouring properties. A closed leaking-tank case is not a deal-breaker, but it is a historical record your lender will ask about. An open case is a different conversation.

3. Will you order a Phase I environmental site assessment?

For a fuel property the answer should be yes. A Phase I under the ASTM E1527-21 standard is how buyers meet the federal "all appropriate inquiries" rule, which protects you from inheriting cleanup liability you did not cause. Lenders on fuel sites expect it.

4. Is the site in or near a flood zone?

Check the FEMA flood map for the parcel, not just the street. If any part of the building sits in a special flood hazard area, flood insurance is required on a federally backed loan, and the premium belongs in your numbers.

5. Is fuel use allowed, and could you rebuild?

Many older stations are "legally nonconforming": allowed to keep operating, but not necessarily allowed to rebuild after a fire or storm. A zoning verification letter from the city answers this for a small fee.

6. Do the seller's numbers hold up?

Ask for three years of profit and loss statements and the matching tax returns, twelve months of fuel supplier invoices, and the state sales-tax filings. Fuel gallons on the P&L should match the supplier's invoices; inside sales should match the sales-tax filings.

7. What does the price say about the earnings?

Divide the asking price by the store's annual earnings before interest, taxes, depreciation and amortization. That number tells you how many years of earnings you are paying for, and whether a lender's debt-coverage test (often 1.25 times the loan payments) can be met.

8. Who else sells fuel nearby?

Map every station within a mile and within three. Count the national brands and the travel centers, and visit at the morning and evening peaks. Competition does not stop a good site, but it caps fuel margins.

9. What are the traffic counts?

Ask the seller for counts on each road the site fronts, with the year and the source. A count projected from a traffic study is useful, but it is not a measured count.

10. What does the supply agreement require?

Branded stations usually come with a fuel supply agreement: a term, volume minimums, and sometimes a buyout cost if you change suppliers. Read it before you make an offer, not after.

The short version

Settle the parcel, the tanks and the earnings before you spend money on anything else. If those three hold up, the rest of the checklist is about price and terms. This is the order a CornerVerdict report follows, with every finding tied to the record it came from.