Any advice on my current situation would be greatly appreciated. I sent out a letter to absentee owners last week and was contacted today by someone who owns 20+rental properties and inherited a smaller commercial building previously used for offices/small businesses and is roughly 4000 sq feet.
The investor told me he initially began to convert it into multiple condos but with his age and other properties it is something that has been on the back burner for some years now. He began work some time back but never got to finishing it and is "interested" in selling it etc. He said he would be open to owner financing options, carrying the mortgage if someone were interested in purchasing it etc. My worry is that I am not all that experience in commercial type properties and don't know how I would handle the owner financing type option from a wholesale stand point. He mentioned how he likes to be creative in how he does things and with me not being too experienced I want to make sure I get this right, but don't want to let this opportunity pass if it presents itself as this is a sought after town and not much has been available as of late.
Any advice on how I should proceed would be greatly appreciated. Should I only explore options for cash buyers and tell him I am not interested in owner financing. How would the owner financing portion go and would that scare away some investors, or would some investors like that?
@Corey Hassan owner financing certainly isn't going to scare away investors! Might actually help you get the deal done.
On commercial most of the value is in the tenant and the lease signed with that tenant.
maybe you can get it tied up with a long term option and find a buyer to pay more. Finding a buyer could take a while.
Maybe you could also partner with him by finding a tenant, getting an ownership portion and then refi or sell once stabilized.
Also, on your question for wholesaling an owner finance deal - same way, just have your buyer pay your assignment fee at closing. You could negotiate the terms up front or leave the contract flexible. Many buyers may want to negotiate their own payment arrangement.
Thanks for getting back to me. All seem like good options. A quick questions though. I am still a bit new, would you mind going a little more in depth about how I could make this approach work
"maybe you can get it tied up with a long term option and find a buyer to pay more. Finding a buyer could take a while."
@Corey Hassan If you put it under contract you might have 30-45-60 days tops for due diligence and to back out if you can't find a buyer.
if you get a purchase option on it then you have the right but not the obligation to purchase. You'll have to pay something for the option, but it's negotiable and you could get an option for 6-12 months or more.
the main reason i suggested this was to give you more time putting together a deal type that is new to you.
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