I opened an Auto Repair Shop August of last year, renting one "suite" in this local commercial building. I started with 4 automotive lifts and 2 employees. I have about $60k into renovations of the office/waiting area and the shop itself. Since opening, I've rented a neighboring suite, knocked a wall out, doubled my shop space and my work force. Now I have 6 automotive lifts, an alignment machine, tire machines, etc, etc.

Here are the current figures and what I'm hoping to do.

-I'm currently in a 5 year lease paying $1.35 a sq ft (approx $9k a month). I'm looking to expand again, another 3k sq ft or so in the same building, bringing my total rent to around $12k a month.

I pitched an idea to the landlord to possibly buy the building, which would include the whole parking lot (which is desperately needed as we move 250+ cars a month), I'd get the remaining 5k or so sq feet in the building, and can start building some equity in commercial real estate.

I come from a residential real estate mindset of "why would I continue to pay $12k+ a month in rent when I can buy a building and pay that or less on the mortgage, and be building wealth by paying down that mortgage, rather than that money making someone else rich by continuing to pay rent.

Here's the catch, he doesn't want to sell. He doesn't want that lump sum of money right now as he doesn't want to pay the taxes. So, I've pitched him the idea that I'll sign a second 5 year lease when the time comes, if a portion of my rent went toward the purchase of the building. Say $4k a month or so. Then, by the end of my second 5 year lease, I will have been his tenant for a total of 10 years, $240k will have been paid towards the purchase of the property (consider it a down payment), and I can then either secure financing and pay him the remaining balance on his $1.4M building, or, continue to make that $12k a month payment to him under an "owner financed" type contract, since he's so worried about the lump sum of money and would probably rather take the steady income.

Now, is that just absurd to ask of him? To ask him to essentially take $4k a month pay cut for the second 5year lease? He'd be guaranteed a tenant for the next 10 years, and, guaranteed a buyer for his building when the time comes. No flipping the property every couple years to a new business or going months/years with it unrented if I leave...

Or, should I just cut my losses and leave after my first 5 year lease, have a shop built, and be 5 years into paying down my own mortgage and have $600k or so already paid towards my mortgage at the new shop? (If my mortgage is $10k a month X 60 months, ill have paid $600k towards that new mortgage rather than just $240k towards the purchase of the current building I'm in). The current location I'm at really isn't bad. But It's an older building that will continue to need maintenance etc, while the new building could be built exactly the way I want and be fresh...

I'm not sure. What are your thoughts/opinions?!

P.S. The main reason for the push of the 3rd expansion in a year, is not only that the demand is there, but that the landlord is a hoarder. He still occupies the other suites of the building I'm not renting, and the parking lot for those suites, and fills them with his "treasures". Oil totes, old aircraft parts, Junker cars/equipment, connex trailers, etc etc. Its very unsightly, when I've spent a lot of money making our lobby and shop very clean. It represents our business very poorly and our store front looks terrible. But I digress. Its an ongoing battle with this guy and id much rather just buy him out, or leave.

Anchorage, Alaska

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