Nonprofit suggests lease at significant loss to owner

[Maegan Erb]

My husband and I purchased our 3rd sf rental in April with the intent of renting it as shared clean and sober house. It is outfitted to serve 6 women. Currently we have 1 month to month tenant. We have received an offer from a respected local nonprofit that runs a clean and sober program to lease the house long term and use it for their participants.  The offer is tempting because it would meet our goals for the house, serve the community, and free up our time for the next investment. However, when running the numbers on BP calculator the requested lease amount leaves us in the negative cash flow of $644 p/mo.

I’ve checked with my realtor and the nonprofit has offered $1,000 below market rate. What are some ways we can engage them in constructive negotiations to pay a market rate lease amount? Thanks in advance for your suggestions.

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*This link comes directly from our calculators, based on information input by the member who posted.

[Trish Wilson]

Hi Maegan,

As Entrepreneurs, we aim for profit. But, we are wired to give and share what we have to be a blessing to many. But again, $1,000 below the market rate is quite high, the $644 negative cash flow is a big number to eat up too. I see that you have the heart to help others, perhaps you can explain to them how your numbers work so they can have a better understanding. Asking also some avenues for the non-profit to raise more funds for them might help not only them but also you so they will be able to pay more than what they think they can afford. That will be a win-win situation. 

Perhaps a question to you: How much interest rate are you paying on your mortgage? Is there any way you can lower your monthly overhead?

I hope that helps.

Trish W