Seller Finance Commercial Land Lead
Hello BP Family,
I need your help. I was presented with a potential deal by an investor friend. I have been doing residential real estate for a year, but this is a commercial lead.
He wants to sale his commercial land that has (3) buildings on it. Buildings are 3,000 sq ft ($1600 rent), 700 sq ft ($700 rent) and 600 sq ft ($600 rent). Tenants are responsible for all utilities. No cam fee is charged. The only building currently leased out is the 600sq ft building. The 700 sq ft building has a different tenant every few months. The 3000 sq ft building hasn't had a tenant in a year. He owns the land and buildings out right (free and clear). He is open to seller finance, but he didn't want to give me a number for a down payment.
The land is in a very prime location, on a main highway in Baton Rouge. Walmart, Smoothie King, Subway, Banks, AT&T are all 2-3 blocks from this property. The seller is asking $575k for the land and (3) buildings. $550k for land $25k for buildings. He said another investor friend in the area told him he sold his land for that price.
I pulled the recent sales from the Clerk of Coutt Office and majority of the recent sales sold between $1-$5 per sq foot. My investor friend is asking $10 per sq foot
I spoke with a commercial banker/investor, and he said he can fund 60% of funds for demolition and to build a new infrastructure on the land. He suggested 4 suites which would cost $35 a sq ft (not sure if this price is good or bad) to build. He suggested that If I find a way to get the seller to owner finance the land, I could be in with little funds out of my pocket. I would get the seller to do profit participation based on the new infrastructure that's built.
I am unsure of how to structure this proposal. How do I go about educating the seller that $10/sq foot is tooooo high. Should I show him the recent sales from the Clerk of Court office if he rejects my proposal? How do I determine what to do with the land/existing structures since it is underperforming right now? How do I put together a proposal without offending him, but it be a win/win for everyone?
My vision was to knock the buildings down and build something new. It's a great location for commercial suites, CVS, or fast food restaurant. I do not want my name or face associate with the project, so I was thinking I could build suites then lease purchase or sale it to someone else.
Any and all help would be greatly appreciated. I had a realtor friend helping me, but little to no movement has been done.