30 Unit Building!

I found a motivated seller for a 30 unit building. I think he will consider a lease/options. But what is this called if it is a 30 unit building and what forms should I be using! Thank you TCI

Comments(5)

  • JohnMerchant15th April, 2004

    With your limited knowledge, I'd recommend you hire either a buyer's broker or lawyer to do the necessary docs for you.

  • davehays15th April, 2004

    I am not sure you can do lease options in a commerical property, but I could be wrong.

    If they are motivated, get them to seller finance. If they need cash, you can work with a note broker to set up two liens, one they will sell at closing via simultaneous close and one they will carry to term for cash flow.

    Is the property operating and cash flowing, or is it vacant?

  • commercialking15th April, 2004

    The lease is called a master lease and it acknowledges your right to sublet the apartments. I also once did a management contract with an option.

    There is kind of a tendency amongst beginners to get bogged down in one form of agreement over another. Work more on understanding what the seller wants in terms of price and money and when he wants to see it. Once you have an understanding of those matters the structure (L/O, land contract, second mortgages,etc.) will beome clear, if not to you then to a good real estate attorney.

  • davehays15th April, 2004

    good point king

    you can try and slap techniques and transaction types on anything all day long, but until you talk with the human being whose name or company's name is on title, and see what their needs are, and their wants (two difff. things), then you can structure from there.

    I mentioned owner financing because I know many other investors who have successfully negotiated seller financing terms with the owner because they don't want a huge capital gain tax hit up front. Two different seller financed notes (one to sell and one to keep) can give the best of both worlds, while ensuring the tax bite is kept at a reasonable or manageable level.

    Best, Dave

  • steadydoses15th April, 2004

    Thanks TCI for all the info. I just wanted to know if this was possible I think I have enough info now.

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