Commercial Real Estate Investing

User Stats

1
Posts
0
Votes

Creative help and advice please!!!

Posted Aug 1 2022, 14:48

One of my good friends has a business here in NM, and is renting from their landlord who is willing to help them out with acquiring other commercial properties to help them grow their business. (Complicating but not sure how to word their relationship.) 

My friend wants to partner with him on an investment. This investment is going to be purchased on a Real Estate Contract by his current landlord, but my friend wants to be partial owners with him as well as the opportunity to buy the property from him after about 7 years. How I am interpreting the wants of my friend is that he wants a Real estate Contract within a Real estate contract? I am completely new to Commercial real estate, but avidly study residential investing. 


Any creative ways to make this work? 

Thank you!

-Kawika Smith

Albuquerque, New Mexico

User Stats

36
Posts
27
Votes
Russ Kitzberger
  • Real Estate Agent
  • Cincinnati, OH
27
Votes |
36
Posts
Russ Kitzberger
  • Real Estate Agent
  • Cincinnati, OH
Replied Aug 1 2022, 14:58

You likely need a general business attorney to review the ownership or partnership agreement and explain the terms and how decisions will be made per the operating agreement, buyout clauses, etc. Explaining this would be best handled by an attorney.

User Stats

211
Posts
202
Votes
Cason Acor
  • Real Estate Agent
  • Salt Lake City, UT
202
Votes |
211
Posts
Cason Acor
  • Real Estate Agent
  • Salt Lake City, UT
Replied Aug 1 2022, 15:02

Agree with what @Russ Kitzberger said. Put simply, your friend will be a minority partner in the project, and wants a buyout clause as part of their agreement.

User Stats

3,922
Posts
1,513
Votes
Ronald Rohde#2 Commercial Real Estate Investing Contributor
  • Attorney
  • Dallas, TX
1,513
Votes |
3,922
Posts
Ronald Rohde#2 Commercial Real Estate Investing Contributor
  • Attorney
  • Dallas, TX
Replied Aug 2 2022, 09:29

This sounds like it can be done. Just need to have clear understanding of who owns what and what the rights are of each party.

Is the LL fronting capital? Option to purchase RE or option to purchase LLC interests?