Purchase a percentage of commercial real estate

[Tzook Bar Noy]

Quick question on purchasing a part of a property.

- We have a property owned by 3 partners, with NO debt, property value 3M

- one of the partners wants to sell his 33% for 1M

- I want to buy his part in the price of 1M

- but I will surely use debt, so that means that bank would like to have my part of the property

- the other two partners  who dont have debt now will have the bank partnering with them with me.

How does this kind of sale happen?

I know there are sales of percentage in the commercial properties, but just cant get my head around the mortgage side.

Thanks!

[Joel Owens]

There are companies that do these buyouts all the time. They DO NOT,DO NOT pay full value of the partners share. They buy with cash at a discount.

The partners likely have an operating agreement that states what a partner is allowed to do and not to do when selling off their shares. It might also need partner approval and the partners might have a ROFR to have first dibs buying the interest at a set price etc.

The fact you want to buy the partners share but get a lender involved is likely a non-starter for the other partners. If it's paid off then likely they are debt adverse. Crazier things have happened but just seems like a long shot that the existing partners will want to be put through the wringer with some unknown lender just so a partner cal sell off their shares.