All Forum Posts by: Cason Acor

Congrats on an awesome deal!

@Tom Gimer yes, you can get an extended policy on commercial property. 

I’m a commercial broker in Utah. I sell properties with standard title policies all the time. It’s very common. Although if I were you, I’d still get the survey. Sometimes with elderly owners, especially if they’ve owned the property for a long time, important information can be lost or forgotten. Sometimes there’s long-standing verbal agreements over property lines or access with neighbors and that can create problems for you if you’re not aware of them before selling. 

@John Roberts where did you come up with 12% interest for the seller carry? I haven't even seen hard money rates that high yet. Unless there's something big I'm missing here, I'd offer him between 6-8%.

I agree with everything else that has been shared. Your landlord is trying to bully you for his own personal gain. He knows the building isn’t worth what he’s asking and is hoping you’re unsophisticated enough to let him back you into a corner. Do not agree to the 60 move out clause he’s proposing for the new lease. Do you have any extension options in your current lease that’s expiring? 

A couple more thoughts I have:

1) The building is worth more to your landlord with you in it paying rent, than empty. 
2) If he kicks you out or won’t renew your lease and lists the building for sale, it will sit for a year+. You’re in a town with 8,000 people, in an economy with a labor shortage (especially among service staff), and interest rates are the highest they’ve been in 15 years. No restaurant owner other than you is buying that building. 
3) Stick to your guns and call his bluff. Offer the appraised value and continue to try and negotiate a favorable lease renewal. 

I’m happy to discuss further if you have more questions or need more advice. Feel free to shoot me a message and I can give you my email. 

So have you signed your lease renewal yet, or no? No reasonable person would pay more than the appraised value for a property, whether they run a business in the building or not. Your landlord’s logic is incorrect. Especially if you have to get a loan to buy the building. No lender will give you money over the appraised value, regardless of what your contract price is. 

You need a lender willing to give you a non-recourse loan. Otherwise anyone who owns more than 15% of the project will be required to co-sign the loan. 

I've brokered deals with existing billboards and am familiar with their contracts. If what you're saying is accurate, and the easement is only granted for ten years, then that's very favorable to you. The last deal I did involving a billboard, the advertising company took some poor old lady to the cleaners 20+ years ago and got her to grant them a perpetual easement for literal pennies. And becuase the easement is perpetual, there's nothing any subsequent property owners can do to change that contract. So in your case, assuming the easement is revoked after the 10 years, I would treat it like any normal tenant lease and renegotiate it when the term expires because there's only one year left. But be absolutely certain of the terms of your current contract with them. Billboard leases tend to heavily favor the advertising company and leave little recourse for property owners. So make sure there aren't any clauses or extention options that might make your life more difficult. If you are able to renegotiate the contract, do everything you can to avoid giving them access through an easement. Treat it more like a ground lease.

Agree with what @Russ Kitzberger said. Put simply, your friend will be a minority partner in the project, and wants a buyout clause as part of their agreement.

Cold calling baby. Pick a geography and building profile, research owners, and dial away. I'm almost four years in and cold calling is still the number one lead source for my pipeline. I also highly recommend the book Fanatical Prospecting by Jeb Blount.