I've been negotiating to Lease Purchase on a commercial property. I am to meet with the owner tomorrow in order to try and finalize the agreement. His initial offer was: $2500 down\dep., $775 per month for 1yr. No consideration towards the $125K purhcase price from the monthly rent.
Through some negotiations we are now at $1000 down\dep., $775 per month with $150 going towards the purchase price for 36 months.
The property is on a main road with great traffic & nice signage; it's a 2BR, 1BA house with a 2 car customer parking space in front & a 15 car lot in back; also at the back is a 1BR, 1BA guest house that is currently rented for $250 ($100-$150 below market). On one side is a WalGreens and the other a small car lot\repair; across the road is a large shopping center. Owner purchased the property for $36K in 1986 & has no financial obligations attatched. The market value is $110K, with approx. $5-$8K in repairs\upgrades needed. There has been $0 in appreciation over the past 4 years.
Sticking Point: Owner does not want to come down on the $125K purchase price, & does not want to pay for the $5-8K in repairs\upgrades, at least $2K needed to occupy. Even though I will have $6400 towards the purchase price in 3 years, there may be 0$ in appreciation. I will owe $118,600, plus the will have an additional $5K or so in it from repairs. Having $123,600 in it. It is in a pretty good location overall and could appreciate, but it may not. Who knows these days, right? If I go in at this price there is a chance that it will have to be a 10year investment, not a 3yr to 5, looking at appreciation only. The other key factor is what can be done with it to produce more income, such as Climate Control Storage, etc. Thank you for taking time to read my request and any help is appreciated more than can be expressed!
I've been negotiating to Lease Purchase on a commercial property. I am to meet with the owner tomorrow in order to try and finalize the agreement. His initial offer was: $2500 down\dep., $775 per month for 1yr. No consideration towards the $125K purhcase price from the monthly rent.
Through some negotiations we are now at $1000 down\dep., $775 per month with $150 going towards the purchase price for 36 months.
The property is on a main road with great traffic & nice signage; it's a 2BR, 1BA house with a 2 car customer parking space in front & a 15 car lot in back; also at the back is a 1BR, 1BA guest house that is currently rented for $250 ($100-$150 below market). On one side is a WalGreens and the other a small car lot\repair; across the road is a large shopping center. Owner purchased the property for $36K in 1986 & has no financial obligations attatched. The market value is $110K, with approx. $5-$8K in repairs\upgrades needed. There has been $0 in appreciation over the past 4 years.
Sticking Point: Owner does not want to come down on the $125K purchase price, & does not want to pay for the $5-8K in repairs\upgrades, at least $2K needed to occupy. Even though I will have $6400 towards the purchase price in 3 years, there may be 0$ in appreciation. I will owe $118,600, plus the will have an additional $5K or so in it from repairs. Having $123,600 in it. It is in a pretty good location overall and could appreciate, but it may not. Who knows these days, right? If I go in at this price there is a chance that it will have to be a 10year investment, not a 3yr to 5, looking at appreciation only. The other key factor is what can be done with it to produce more income, such as Climate Control Storage, etc. Thank you for taking time to read my request and any help is appreciated more than can be expressed!
Eddie Churchwell
"Burning The Bridge!"