How to develop CRE with very little capital

6 Replies

Hi BP. I am interested in purchasing a commercial property. It’s a great location which is why I want it. Bc of my lack of cash I am planning to obtain a buyers option on the property and seek investors and research franchises, all my options and due diligence, etc....well on my way in those arenas- however say I get the place for $100k and have the property ready to negotiate w a franchiser or equity partner...what’s my game plan? My goal is to own great real estate and rent it, not run another business or be involved. Any guidance as to how this could play out would be much appreciated. Thank u BP Nation. -Brad

first thing to do is see if the seller will let you tie up their property while you work on your dream.

if its not a high demand property and they have a kick out clause.. that might work.

I can tie up the property for $2500 for 6 months with an option for another 6 months for another $2500. Seller is of the highest character and willing to be patient w me. Which is nice. Just hope I can learn a bunch and have some interested ppl during that 6-12 months making my decision to purch a no brainer.

@Bradley Bissett The advice you got from @Jay Hinrichs is spot on. In your case, you are in a good position. Tying up a good property at $2500/6 months is not a bad option.

If you provide the specific details of the property - primarily, #s, any peculiarities (why are you getting such a sweetheart deal) and why you think this is a good investment - I'm sure, more people can chime in and assist. 

I have a great relationship w the seller. She is aging and her kids are retiring and not interested in the property. The CRE is not on the market. I’ve been talking w her about this place for a number of years so she’s starting the process w me to possibly avoid realtor fees.

If it’s a great location for retail and you can attract a national investment grade tenant in a build to suit lease for the site then there are companies out there who will partner with you by providing 100% of the equity to partner on the deal.

If this were me and the location were great I would tie the property up, do a demographic study and prepare a short marketing book including traffic counts, household income in 1-3-5 mile rings, aerial shots showing other retailers in the area,ect. Then take this to a trade show like the ICSC or go direct to the real estate reps and brokers for retailers and see how quickly you can get it leased.

Thank you @Derek Carroll I appreciate the great feedback. My gut says that if I can tie it up then the location will bring about a solution.

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