Commercial Property and Finder's Fee questions.

[Philip Lamachio]

Thanks in advance for your answers. I was following up on several FSBO offerings I saw while driving near my home. I was actually looking for cash flowing rental property, but when I got a call back on a property with two homes on it, the owner said he wanted $275K for the two properties. Rentals for the two older homes would bring at most 15-1800k a month total, so I asked him why he had it priced so high. He believes that the 2.7 =/- acres that the homes sit on will be prime commercial development land, as this is the only exit that has not been commercially developed off this highway going out of town. He expected that whoever bought the land would hold it until they had a development plan, then bulldoze the homes and build.

I told him that I was only interested in rental homes at this time, and was not a speculator, at which point he volunteered the land had been on the market over a year and indicated he was ready for an offer, presumably much lower. 

He then offered me a finder's fee if I could bring a buyer. 

My first question is this:....what is a typical finder's fee? A percentage of the sales price? If so, what percentage? 

Second question: How do I approach a potential land speculator? I haven't yet begun to get to know the local investors or go to any local REI meetings yet.

Any other random thoughts related to these questions welcomed!