re: Is this business a good buy?

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The business is a well established fuel, tire, and minor repair shop. It comes with property, building, tanks, equipment, prepaid insurance, cash on hand, etc. It is clearing $130,000 a year

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Others have asked you pertinent questions already. The ask is high based on net. I'll go ahead and ask, but I assume the $130k is net - after taxes too?
I'd also like to know what the gross is yearly. $130k net on $500k would be great, but $130k on $1M, not so much.

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Everything is paid off as this business has been around for 50 plus years. Everything is in good shape.

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As others have said, the a majority of the value of the business could be the real estate involved.

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I'm leaning towards no.

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If it’s old you reasonably will need to do some upgrades. You need to get the real estate value, I’m not sure how you would want to include that but whatever you pay as said paying a $1 mil note with only $130,000 in income won’t be easy. So it really depends on how much value you can bring to the place. If the real estate is worth $500k or more and you can increase sales by 2x it would certainly start looking more lucrative.

Has he been paying himself rent ?

If no, run away what he has is a piece of real estate with a service station that needs to be demolished and cleaned up per DEQ standards (going to be expensive) and repurposed
If he is only making 130 without paying rent it can not survive, if he has been paying rent and that amount would cover your note , then it is worth investigating further