All Forum Posts by: James W.

Just spitballing here, since nobody has replied yet... can you get the 3 month security deposit but only have one person sign the lease, so you have less paperwork in the future?

Obviously we all hope that their business does great and there's never a need to pursue legal means, but in the worst case scenario I would want to have the strongest tenant as the main signer.

This should be a great conversation!

$500,000 property

Advertised as producing $150,000 yearly income.

Thanks for the response, I appreciate your time. 

It would change his tax bracket and he also expressed interest in distributing the income over several years rather than taking it all at once.

Why not buy with a mortgage? Because I have to put down 20% of anything I borrow on a commercial property, and a land contract would defer a significant amount of my capital, which I want to use to build income property.

I understand that most banks wouldn't lend in this situation, but I have a solid history with my bank, assets to back up my request for funding on a project of the type I'm considering, and a reasonable foundation to believe that I will get the funding where the average investor would be denied.

It's my understanding that a land contract is as solid as the wording in it, so what I'm looking for here is people with experience doing deals like this. 

I'll be brief to start. I may start a new thread with more details, but hopefully the mods will work with me :) .

I'm in commercial and residential REI. Looking to expand my commercial side on this deal.

It's a raw land purchase, where I would buy and develop.

Owner is retired, out of state, decided to sell rather than hold. I could buy the land but it would take me a couple years to pull money from other holdings to continue the development, so here's my idea.

They give me the property on a land contract. I have the right to develop. I pay them X (~$25k/year) for 5 years, or longer, with a balloon payment at the end of our contract.

I am able to build my business on the property. They get to avoid the higher tax rate because they are collecting smaller chunks of cash per year, rather than the entire amount at once.

The land is a little under 200k. Development will end up being an easy 500k over the next 4 years.

I think my main concern is that I haven't done a land contract on commercial property, and I'll be sticking quite a bit of cash into developing the property before we actually complete the deal... and I don't want to risk losing my time and money over something stupid.

So... any of you have experience with Land Contract commercial deals?

TIA and bigger pockets = <3 !!!!

100k cash gets me 500k in purchasing power from all of my banks. 

Amortize 500k of rentals over 20 years, let the renters pay the mortgage + put money in your pocket as rental income. Refinance in a few years, pull cash out of the homes, buy more. Wash, rinse, repeat.