Buying a property then the billboard itself?


#1

Hi Frank and all. I have a chance to purchase a piece of commercial property at the start of town which is no more than a mile from what is now the main hub of businesses. The purchase price is low for commercial but it’s a little below highway and has about 10% of the property being wet/marshy.
The land has had a billboard on it for 20-30 years and I can’t remember it ever being vacant. The current lease runs out in 2.5 years and the land owner is getting their taxes paid on the property and they make $250-300 a year above that.
The reason the land is cheap is because it is 7-8 feet below street level and wet in one area. No one has developed it in 30 years probably because of the costs to fill it and address the water area, along with not being the hot part of business development as it is further up the road. There are a lot of residences going in on that end of town now so it may be a good steal to fill it and put in a small building with 2-3 spaces to lease out to a Papa John’s, Subway etc, but it’s a big gamble to buy the land just on that basis.
Now that you know the background info here’s my take and question. I am very interested in buying the land if I could leverage my way into buying the billboard on the property in 2.5 years, but to buy and collect ground rent it would take 40 years to recoup the cost of the property purchase.
My question is Frank,or others if you had had dealings with this scenario, how likely is a billboard company willing to sell a billboard to a land owner versus not getting anything out of the location? The structure is wooden and very unlikely they would ever put it up anywhere else. If the board goes away you will never be able to put a board back in the location as it is grandfathered in. So if I buy the land in 2 1/2 years the lease will be up, I could negotiate a higher lease to the company for x years or try and leverage them and say I won’t renew the lease but I will buy the board from you.
Buying the bb would greatly reduced the time to recoup the initial investment plus make any future decision easier to take a gamble on developing the land for a building. Worse case scenario, I own a billboard that stays leased and the land.
Experiences with success or failures with this type opportunity, thoughts? Thanks.