Am I missing something?? - Posted by Joe

Posted by Ed Copp (OH) on July 15, 2003 at 19:56:18:

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Am I missing something?? - Posted by Joe

Posted by Joe on July 14, 2003 at 15:38:58:

I?m new to this and I?m hoping I can get some understanding. I have been making offers on properties, but none have been accepted. I think I?m missing something. I?m mainly interested in commercial property with tenants in place already. Basically my offers go like this: I offer to lease the property from the owner for 6 Mos. to a year to sort of ?test drive? the property and see how it performs. Then if everything is as advertised, I would purchase the property for the asking price minus 40% of the money I?ve already paid them. The lease amount more than covers the owners? current payments on the properties. What am I missing?

Joe

Re: Am I missing something?? - Posted by Tom (WA)

Posted by Tom (WA) on July 14, 2003 at 22:39:42:

To make a good deal on a purchase, you need to find a motivated seller. I can’t imagine that a motivated seller will wait 6 months for a “maybe” sale. I also think that the 6 month “test drive” says to the seller that this buyer might not know what he is doing. Why would he want the risk of an inexperienced manager controlling his property. The seller has all the risk. Learn the market, know what will work and go buy the property.

Re: It’s hard to buy for half price - Posted by Ed Copp

Posted by Ed Copp on July 14, 2003 at 19:40:46:

So don’t give up too soon.

If I understand your post correctly you want a performance guarantee for six months or so. You want to guarantee that everything is as represented.

Then you want to reduce the price by the amount of rent you have paid. Then you want to reduce the purchase price by 40%. This is about 50 cents on the dollar (maybe). So it might just take a while to find a seller. In the meantime all your rental payments will be 100% deductable.

Patience, is the answer.

Re: Am I missing something?? - Posted by GL - ON

Posted by GL - ON on July 14, 2003 at 16:55:25:

Shawn has some good points. There is also the fact that you are asking the owners to entrust properties worth hundreds of thousands of dollars to a green newbie, on a “heads I win - tails you lose” basis.

Re: Am I missing something?? - Posted by Shawn J. Dostie

Posted by Shawn J. Dostie on July 14, 2003 at 16:00:50:

You don’t seem to have any motivated sellers. You are asking them for a test drive and then to credit you with 40% of what you have paid (in payments I’m Guessing?) Are you sure that the seller understands what you are trying to accomplish… and how it might benefit him? Remember, for a deal to be successful, it must be win win, especially in the eyes of the seller.

Good Luck,
Shawn(OH)

Re: It’s hard to buy for half price - Posted by Tom-FL

Posted by Tom-FL on July 14, 2003 at 20:32:16:

He want’s a credit of 40% of the 6 lease payments he made, should he decide to buy.