Preparing an offer advice

[Caleb Chandler]

It seems like the only time that I get on here is when I am seeking advice, and hopefully at some point I can actually contribute some advice.  However, it seems I do need your advice again, and the knowledge on here always seems to get me through.  I hope this is the right forum.

We are in the process of developing a start-up business, and as part of our business plan, we need to identify real estate that will work for us.  We are meeting with the local Small Business Development Center to review our business plan tomorrow, and I know this section is going to come up.

We have identified a couple opportunities, and we are actively pursuing one opportunity.  Unfortunately, it is does not have the required space, but the owner does have adjacent parcels.  They are currently deciding on the price they would accept for them.

We were told by their representative we could purchase for $175,000.00, which we can probably get for $150,000.00.  We explained it wasn't enough land, they are willing to add an additional parcel for the $175,000.00,  However, I need the additional parcels to fit our business model.  The parcels are in a speculative investment area, and the price we anticipate them wanting will not be bankable.  We anticipate $150,000.00, which will include development of $50,000.00

We are looking to put in an offer for the initial offering, plus the additional parcel they are willing to include, for $200,000.00, if they would be willing to enter into a long term triple net lease with a 5 year purchase clause for the $150,000.00 and annually at $150,000.00 plus appreciation retroactive over 5 years.

I hope that is enough back story, as the advice I am requesting is what return on the NNN should I offer them? I have a budget of $36,000 annually for my rent expense, but in this case, I have a mortgage payment as well. In addition, I have a budget of $12,000.00 for taxes, which is 3-4 times what the current taxes are. (Like I said, we are trying to identify opportunities)

Secondly, if they would not accept this, I would to try identify an investor willing to purchase the entire thing.  How should I structure this to take to an investor?

Thank you for taking the time to read this, and for any advice you may have.