Posted by Ed Garcia on January 16, 2001 at 23:11:06:
Mike,
I’m not sure what you’ve done here. It looks like you ask a question, and then answered it all at the same time. (smile)
To answer the title of your post, YES it can be done. The question is what’s on the sellers mind. I agree with you on number 2. It’s seem to be of minimum risk, if you can pull it off. Let us know what happens Mike, and Good Luck,
Ed Garcia
Could this really be done? - Posted by Mike Kuhl
Posted by Mike Kuhl on January 16, 2001 at 17:44:17:
I am interested in purchasing a 300 unit storage facility that recently went on the market. The facility also has 6000 square feet of retail / office space. The facility is only 2 years old however it has been managed or miss managed by an absentee owner. It is currently at about 50% occupancy and is right at the break even point. Asking price is 2.1 million, has an assumable loan of 1.3mil @ 9% and the owner will offer terms to right buyer. Seller is firm on price.
In a conversation with my agent, buyers agent, we discussed two ways to structure the deal
1.Offer the full asking price and ask seller to carry a zero interest 2nd for 12-18 months giving me time to increase income and occuppancy before taking on a million plus loan.
2.And I really liked his one!
Set up a lease option for 12-18 months where I basically assume the sellers first as my lease payment. After the lease term occupancy rates and income will be up and I have put zero dollars in the deal until I am confident that the facility can get to a profitable level. At that poit I have a year under my belt as well.