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Updated over 2 years ago,

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2
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Matt H.
  • Baton Rouge, LA
0
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2
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Help me purchase my first commercial RE property

Matt H.
  • Baton Rouge, LA
Posted

I have been leasing a commercial building for my business for five years.  It's time to renew the lease but the Owner has made overtures that he would consider selling the property to me if I allowed him to owner-finance the deal.  When I asked about traditional financing he simply said, "nope, not gonna take those gains all at once."  I didn't probe any further, but why wouldn't he want a check for the full amount up front?  Is it a tax thing?  Purchase price is somewhere in the neighborhood of $1M and he has mentioned 4-5% interest.  Down payment has not been discussed but I have enough saved to put down 15-20%.  

Here's my issue... for reasons unknown the owner is not willing to sell to me today.  I would have to wait another 2 years.  What type of Lease should I negotiate with the Owner?  A Lease-to-own?  A lease-option?  I've read up on a few things but it's a bit confusing.  I get the feeling the Owner would not want to sign anything that the IRS would characterize as a sale, and I don't want to pay rent for the next two years unless my rent payments are going toward the purchase price.  The Owner has been good to me and my business, and I believe his intentions are sincere and not a tactic.  There's something on his end preventing him from selling to me now, I just don't know what that could be.  

What's my play here?  What type of lease should I sign that sees me as the building owner in 2 years?  

Matt

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