Use the Calendar when Underwriting

A while back I was trying to buy a facility in Southern Wisconsin. A college buddy had clued me into the possibility that the owner was interested in selling. The owner had two locations about a mile apart in a relatively small community.
The first location was a relatively new site. Modern Trachte buildings and paved drives. It had landscaping and a water retention area. Very Nice. And… it had space for another building in the back of the property!

The second site was a little older. Pole barn construction and gravel drives. On two sides of the buildings, the tree line was encroaching on the drives making it a little tight to get a pickup through. And… the entire front of the property was wide open. 30 yards deep across the road frontage was empty!
I immediately started planning to utilize this prime real estate. I called someone I knew through the Mastermind to inquire about him supplying some Portable units. I designed a permanent building stretching across the front of the property. I was going to put signage on the side of the building facing the road. I was really getting excited about the possible additional income I could generate in the deal!
Negotiations were ongoing. (Actually, still are. Several years later, I am still in contact with the seller and he knows I want it.) I was up visiting friends a couple of months later and went to inspect the site. It was January. I showed up to the second site and I saw…snow!
It was everywhere. The entire front of the property was piled with snow. You couldn’t see the buildings due to the piles of snow. Are you kidding me? That prime real estate already had a use. It was the only real spot in which to pile the snow. And since it was Wisconsin, piling snow was a common thing. My dreams of expansion were halted. Crud.

But it’s a good lesson that I now work to use every time I visit a site. In many cases, I don’t have the luxury to spend 12 months evaluating a property. But I can spend some time thinking through how the environment will impact the facility.
Winter: Obviously snow removal. But ice can be a concern also in my part of the country. Buildings that are aligned East to West often have ice issues on the Northside of the building, where sunlight can’t hit the ground.
Spring: Rain. Where does it go? Are there gutters to help control? Does the ground fall away from the buildings? Is there a weather ledge on the slab to help protect the contents? Are there trees overhanging the properties? If so, will the weight of leaves lower branches so they are in the way?
Summer: Insulation to assist in humidity issues? Are doors or walls fading unevenly due to sun glare? Lots of grass equals lots of mowing. The space that you might develop is going to need mowed until you do.

Fall: Leaves. Where are they going to end up? Typically, they find the main entrance and pile up there.
These are some obvious things when looking at real estate. But the main thought is an important one. Walk the property and envision the seasons. You may avoid some later frustration.
Gary Edmonds

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