Property with tower

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AngelFire91

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Hey everyone, So I'm looking at buying some property and it includes an "Income producing tower" which used to be licensed to a FM Broadcast station according to google. However I can not find any FCC licenses associated with it currently and I don't believe it is being used any more. It is still in great condition but my question is; Does anyone know how much "Income" a broadcast lease could bring in?

The property is listed at about $80,000 over any other related properties in the area and I just don't feel that a 80ft tower warrants that much of a price increase on the property. I would LOVE to have the tower along with the property but just can't justify paying that much for a tower I could probably put up myself for less than $10k. Would I be reasonable in asking a significantly reduced price on the property?

Thanks guys!
 

FKimble

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Ask what the current "income" is on the tower. Ask to see signed contracts since they are uping the price apparently based on this "income". You can always make a lower offer. I've never paid "asking" price for property. If I think it's too high I walk away.
 

N4GIX

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Even at today's inflated prices, you could put up an 80' Rohn 45G guyed tower for around $5,000.

No 80' tower would be likely to produce any real income IMHO...
 

AngelFire91

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Ask what the current "income" is on the tower. Ask to see signed contracts since they are uping the price apparently based on this "income". You can always make a lower offer. I've never paid "asking" price for property. If I think it's too high I walk away.
I was planning on it, but I wanted to go into it with a pretty good idea of what to expect price wise and I fully plan to walk away. This wasn't something I was out looking for, it just kind of popped up and seems like a great piece of property to get into IF I can get it for the normal market rate around here, not this super inflated rate because it has a tower on it. The only thing I can think of is he's trying to sell the equipment with it too, which in that case what the hell am I going to do with a bunch of out dated broadcast equipment? haha.

Even at today's inflated prices, you could put up an 80' Rohn 45G guyed tower for around $5,000.

No 80' tower would be likely to produce any real income IMHO...
The tower is up on a pretty descent hill that overlooks the city, but yes. I agree, not a 'real' income producer as it's made out to be. That's why I'm super skeptical of it. But it would be a nice place for me to put some of my own stuff up on! ;)
 

NC1

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Even if there is a lease, assume that when it expires they are not going to renew. When it is your money at risk do not assume anything and don't let people sell you on a "best case" scenario.

If that is what they are doing, then it means they want to be paid now based on a predicted future value, which is really bad business if you are the buyer. They want their money first, and you can sit and hope you get paid.

If you are really interested in the property and like it, you can only include the business aspect up to the day the lease expires, it is a big gamble as to whether or not the lease will renew. I have heard nightmare stories about this type of situation. Who supplies electric? If it is on your meter and they pay you, then RUN away as fast as you can or have them get their own meter.

There are a bunch of regulations to follow, as it is with any other business. What permits are needed and who is responsible for them? What if they abandon the contract? Who takes down their equipment?

There are a ton of questions that need to be answered. If it were me, there would be two separate contracts - one for the land and improvements, and another for the "existing business" which would be based on the performance (income) of the business. I would give the seller 15% of the NET profit for ONLY the existing contract up to the date it expires. Any new business you secure is yours and has to be specifically excluded in the contract.

$80,000 is far too much, it might only be worth 1/10th of that (and is probably more likely), or figure out a cap rate based on the contract and when it expires.

Find a real estate attorney who deals with existing commercial businesses. A Business Broker would actually be the perfect place to start gathering information on how to value the business aspect.

Just remember: if you are taking out a loan or making payments of any kind, you will be paying interest on that extra 80K (or whatever) tacked on, and that will add up for 10 or 20 years or so.
 

RFI-EMI-GUY

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Also the tower needs to be physically inspected for any rust or mechanical damage. Towers can rust from inside out or be painted over concealing rust. Is it self supporting or guyed? What wind speed standard is it build to EIA222x,y or z? Can the tower support any number of antennas? Does the property have any past or current code violations for anything? Was diesel fuel, heating oil or gasoline ever stored on site? If so, talk to the EPA.

Is there an equipment building? Is it suitable for the installation of modern communications gear, HVAC. Generators UPS, etc? Is everything up to code? Is the tower located near an airport or on a glide slope to an airport? Easy enough to check using FCC TowAir on line calculator.

Check the utilities, is there sufficient power, cable, fiber and even water and sewer available? Can the property ever be rezoned in a way the is either favorable or unfavorable to you? If you have to replace the tower, will neighbors complain to the City or County? It may simply be grandfathered and if replaced, require a planning approval.

Can the seller offer any proof of income or inquiries by anyone wanting to utilize the tower? If this were a prime tower, there would be users on it. If there are tenants you need to see what the terms of their leases are. Talk to them, are they inclined to renew? Can you trust the tenants honesty or are they "the brother in law". Don't get "home towned" by attorneys, RE agents, brokers, tenants, inspectors etc.

What is your business plan should you buy this property? Land Mobile Radio is in a slump, the cellular providers build there own towers. Maybe there is a market for a WISP? If so who are the customers?

I would also be concerned if there is adjacent property suitable for building a tower. It won't help your business plan if one of the big tower firms puts up a 350 foot tower next to yours.

A non-income producing tower is more of a liability. You really need to perform due diligence.
 

RFI-EMI-GUY

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(snip)
The property is listed at about $80,000 over any other related properties in the area and I just don't feel that a 80ft tower warrants that much of a price increase on the property. I would LOVE to have the tower along with the property but just can't justify paying that much for a tower I could probably put up myself for less than $10k. Would I be reasonable in asking a significantly reduced price on the property?

Thanks guys!

Or why not find cheaper property nearby and put up your own tower?
 

popnokick

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$80K will look like a giant bargain if you discover that one or more wireless service providers, LMR, or even cell company is looking to use it as a coverage fill-in or even primary site (as noted by RFI-EMI-GUY). And of course anyone who has those plans / that info will do what they can to keep it secret, because the value of the site goes up instantly when you or anyone else finds out. The operative phrase has been mentioned: Due diligence. Sort of like when Amazon or Walmart searches for new sites... you won't read it in the paper until it's far too late. BUT, if all you're looking to do is get a high spot where you can put up a nice antenna for your own use, then N4GIX probably had the best advice.
 

NC1

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Even at today's inflated prices, you could put up an 80' Rohn 45G guyed tower for around $5,000.

No 80' tower would be likely to produce any real income IMHO...

I could not possibly agree more with these statements.

The seller most likely believes he has a gold mine, but there is a high probability that the buyer will get only the shaft.

Buy the property you really like, and then look into putting up a tower and leasing to offset the cost of it and maybe make a profit.

The link below will give you a realistic guess as to what you can expect with leasing a tower to tenants.
http://www.crowncastle.com/property-owners/landowners-with-leases.aspx?utm_source=Adwords&utm_campaign=competitor_exact&utm_device=c&utm_medium=cpc&utm_content=84700105406&utm_term=verizon%20towers&utm_keymatch=e&utm_adpostion={adpostion}&gclid=CNW-kJ7nyM0CFdgIgQodeewBow
 

AngelFire91

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Thanks for all the responses so far guys. I was not looking at this property as a business opportunity. I want the land, and it just so happens to have a tower on it. I was just curious what a person could reasonably expect 'income' to be from a tower with a lease agreement on it so I can go into negotiating with an idea so no one can pull wool over my eyes. According to the FCC and ASR databases it appears the company that was using it now has their own tower in a different location and I suspect the one on this land has no one on it and the seller is trying to just "play up" the potential opportunity IF you could find someone that wanted to lease space on it. In all reality I would prefer there to be no current lease on it and just use it for my personal Ham and scanner projects.

Also the tower needs to be physically inspected for any rust or mechanical damage. Towers can rust from inside out or be painted over concealing rust. Is it self supporting or guyed? What wind speed standard is it build to EIA222x,y or z? Can the tower support any number of antennas? Does the property have any past or current code violations for anything? Was diesel fuel, heating oil or gasoline ever stored on site? If so, talk to the EPA...
I can pretty much guarantee that this tower is not in a prime location. There are numerous 1000+ footers only a couple miles away. Like I said above, I'm not looking at it from a business stand point, I do not want to even have to deal with leases and what not. If it has a current lease on it though I was just wondering how much I could expect someone to be paying for it's use. There was no fuel stored there and a very small "repeater room" is all that is adjacent to the tower. It has electric to it. It has been FAA surveyed and everything is approved according to the ASR database and the tower was built in 2004.

$80K will look like a giant bargain if you discover that one or more wireless service providers, LMR, or even cell company is looking to use it as a coverage fill-in or even primary site...
I can pretty much guarantee this is not a prime location and people will not exactly be banging on my door for it's use. It is only maybe 2 miles outside of the second largest town in my state and there are plenty of other 1000'+ towers nearby. But, I will ask once I finally get to talk to the seller.

I could not possibly agree more with these statements.

The seller most likely believes he has a gold mine, but there is a high probability that the buyer will get only the shaft.

Buy the property you really like, and then look into putting up a tower and leasing to offset the cost of it and maybe make a profit...
I totally suspect this to be the case, and I really like this property actually and that's why I originally even was looking this land. Then I found out it had a tower on it which I really only want to use as my personal tower. So, yeah... I don't believe anyone would want to arrange a lease on it, but... you never know!? Thanks for that link!
 

RFI-EMI-GUY

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(snip)
I totally suspect this to be the case, and I really like this property actually and that's why I originally even was looking this land. Then I found out it had a tower on it which I really only want to use as my personal tower. So, yeah... I don't believe anyone would want to arrange a lease on it, but... you never know!? Thanks for that link!

In that case you should treat the tower as a liability and eyesore when talking with the seller or anyone else remotely related to the deal. Ask the seller if he has had a quote for the removal of the tower. Tell the seller you like the property but your spouse is concerned the tower will fall. You get my drift!
 

AngelFire91

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In that case you should treat the tower as a liability and eyesore when talking with the seller or anyone else remotely related to the deal. Ask the seller if he has had a quote for the removal of the tower. Tell the seller you like the property but your spouse is concerned the tower will fall. You get my drift!
... ;)
 

NC1

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As long as you like the property, make an offer on the property based on it's value. Then throw in whatever dollar amount you think the tower might be worth in terms of what it would cost to replace.

I was looking at a property that was the highest around for about 25 counties, and sat at 3,800 ft. All I would need to do is clear the tree line with a small 40 ft mast and put an antenna on top.
Just for fun, I put the location into TVFool to see what stations I could get and it returned about 45 of them that would not require a big antenna. Too bad the house needed a full renovation because of mold.

Good luck on whatever you decide.
 

mmckenna

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I've got a couple of cell site leases at work. Last time I looked, we were getting $1,500 a month for tower access and a small foot print for their base station gear. Electricity was paid for by the carriers. We provide the a circuit breaker with a meter, they install their own distribution panel.

I don't know what a FM broadcast station would pay.

One thing to consider is that if cellular coverage is already built out then there may not be a big demand for the tower. While a Rohn 45g type tower seems pretty large to a hobbyist, it's not really that good for a couple of large cell panel antennas.

I wouldn't pay $80K for a tower that size and a small hut. Best you could possibly hope for is maybe an ISP would like the site for wireless network distribution. It would take a very long time to pay back $80K investment.
 
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