Posted by Ernest Tew on June 07, 2000 at 08:07:26:
A net lease with an option to buy could be the way to go. If you think there is a lot of “upside potential” I would suggest holding the option in a Roth IRA in order to avoid capital gains taxes when you resell.
As a matter of policy, it’s always better to have a figure in mind but arrange for the other person to be the first to mention price. If the figure is well below what you are willing to pay, say something like, “that sounds like it could work, but what about…?” If the price is too high, you may want to show your surprise and say something like, “how did you arrive at that amount?” Then, ask for time to think about their proposal.
Here is an example of just how important it is to arrange for the other person to be the first to mention price. A developer approached me a few months ago about buying three of our lots at the corner of our mobile home park. He needed additional space for a drugstore. I thought a fair price would be about $35,000. After a few visits and a lot of discussion, he suddenly said, “look, if we can work this out, I’ll pay you $200,000 cash.” We accepted!