First Property and have a couple of question

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First Property and have a couple of question

Hakim Mouslim
Member since 2024 · 3 posts · 0 votes

Hello, 

I am a bisiness owner of a bar taht is coming to an end lease term. I have decided to purchase the property from the land lord and i would liek to know if the following asks are heard of or used:

1. The purchase of the property is $3,000,000.

2. can I ask my landlord to lease the property for a term 24months after which the property will be acquired if not before? Can I sign  lease term and a purchase contract at the same time ?

3. If i can, is it fesable to ask the landlord that lease payment will be paid monthly and the Property purchase amount will be paid within the 24month periode? ( time for me to get a bank loan?)

4. if all this is dandy how do I go about asking him? will this be a lease with purchase to buy or an acquisitions with an initial 2 year lease term.

thank you 

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Marc Winter
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
2y

Hakim, 

It reads like you want to do a lease with an option to purchase.  Yes, you can do both at the same time, ie 

1) contract to purchase in the form of an option to buy within 24 months, with a 1-year rollover clause, and 

2) lease for your preferred term, say 24 months.  Insert a rollover clause for an additional year in case you need a bit more time to get financing.

The lease should not mention the option, and the option should not mention the lease--if things go sideways, you'll be able to part ways with fewer complications.  

Simply tell the seller you want to purchase the property, and "Here's how I'd like to do it"...

Keep investing and moving forward!

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  • Marc Winter
    Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    2y

    Hakim, 

    It reads like you want to do a lease with an option to purchase.  Yes, you can do both at the same time, ie 

    1) contract to purchase in the form of an option to buy within 24 months, with a 1-year rollover clause, and 

    2) lease for your preferred term, say 24 months.  Insert a rollover clause for an additional year in case you need a bit more time to get financing.

    The lease should not mention the option, and the option should not mention the lease--if things go sideways, you'll be able to part ways with fewer complications.  

    Simply tell the seller you want to purchase the property, and "Here's how I'd like to do it"...

    Keep investing and moving forward!

    3Reply
  • Hakim Mouslim
    OP
    Member since 2024 · 3 posts · 0 votes
    2y

    Great Thank you Mark for your asnwer, very helpful.

    I am looking as something a little more " done deal" thank an option to by as from what io understand the seller can still sell to other parties. 

    is there a close that stops that? maybe a promise to purchase from my side as i am determined and 100% sure i will be acquiring the property.

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  • Marc Winter
    Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    2y

    Hakim,

    You can record a memorandum about the option or contract--speak to your attorney on what form that should take.  To record a document, it must be notarized. 

    The recorded document will put the public on notice that there is an issue (cloud) with the title and that will prevent someone else from buying the property without dealing with you first!

    I'm a real estate broker and investor and have done this multiple times.  However, I'm not an attorney, so please make sure to discuss this with them.

    0Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    2y

    I would stop right away. How successful is the bar that you are willing to pay $3m for the real estate? Where is that price coming from? What you are proposing won't be attractive the owner right now, but also since it's currently leased to you, not a ton of other people will want to take over real estate with the bar tenant. If you want to do a lease option, you likely won't get compensated for your payments so it's safer to build the collateral and just buy it when you get qualified.

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  • Luis Astudillo
    Member since 2024 · 23 posts · 8 votes
    2y
    Quote from @Hakim Mouslim:

    Hello, 

    I am a bisiness owner of a bar taht is coming to an end lease term. I have decided to purchase the property from the land lord and i would liek to know if the following asks are heard of or used:

    1. The purchase of the property is $3,000,000.

    2. can I ask my landlord to lease the property for a term 24months after which the property will be acquired if not before? Can I sign  lease term and a purchase contract at the same time ?

    3. If i can, is it fesable to ask the landlord that lease payment will be paid monthly and the Property purchase amount will be paid within the 24month periode? ( time for me to get a bank loan?)

    4. if all this is dandy how do I go about asking him? will this be a lease with purchase to buy or an acquisitions with an initial 2 year lease term.

    thank you 


     Good morning Hakim,

    My name is Luis, I am a residential/commercial broker. If you are to make an offer to purchase the property the seller in this case has the option to honor your offer to purchase and not lease the property while your loan to purchase the property is in process. With the lease to purchase the seller more than likely would ask for a deposit that can be applied toward the down payment when the actual sales take place or the seller can "finance" a certain portion of the down payment. What I think is important is to know what your financial strength is purchase the property to structure a loan to best fit your needs or come up with a strategy to allow you to buy the property say in a lease with an option to purchase. You could have several alternatives as to how to purchase. Let me know when it is a good time to chat about your real estate needs. Thanks.

    Luis

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  • Hakim Mouslim
    OP
    Member since 2024 · 3 posts · 0 votes
    2y

    Hey Luis thank you for your reply. Very Helpful. 

    Can you elaborate more on the last part " purchase the property to structure a loan or come up with with a strategy to buy property in lease with no option" I could not really grasp what you meant probably mainly because i am new to this. 

    Thank you so much.

    0Reply
  • Luis Astudillo
    Member since 2024 · 23 posts · 8 votes
    2y

    Hey Hakim, 

    Sure thing, one of the main things to understand is that you have to know how ready are you to purchase the business/property, and you do that by providing all your financials to see if you have enough capital and reserves. Let me give you an example, I believe the asking price is $3 million, you will need anywhere from 20% to 30% downpayment between $600K and $900K ( private lenders may ask for more downpayment) Then you will finance between $2.4 million and $2.1 million and your payments could be $20k a month which a lender could ask for 12 months reserves. Once you know how much you qualify for, then you can either move forward with your current capital and reserves. If you are not quite ready then you can do a lease option where the majority of the lease payments will go towards your downpayment that will be applied towards the "future purchase" two or three years down the road. I don't know where the bar is located nor do I know if the property is worth $3 million, you have to do your homework on this project. Legitimate hard money lenders and private lenders may not ask for business taxes, bank statements, or other documentation but they will ask for much more money down, their terms are usually 12 to 24 months loans, and higher interest rates. You have to decide how you want to approach this and what type of financing is best for you, commercial financing, hard money, private lending, and/or seller's financing (owner). Let me know if you have any questions. 

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