I am currently working with a friend of mine to open our own retail business. I have also found that the building we are looking at renting through is up for sale. I have been thinking of buying it because I feel it is not being managed all that well, first off the owner has yet to answer our letter of intent that we filled out a week ago and our agent gave him until the following Monday 3 days later to answer. So obviously he is out of town, and is hard to get in touch with. My problem is, I do not know how to go about doing this deal because it is currently listed with an agent here in town. I have read the NO to Low money down book By Brandon Turner and I have thought about the MLO, but I have also thought about just a Lease with the Option aspect. What are your thoughts and can anyone give me any help with this idea.
In this day and age, "out of town" does not cut it. Have your broker press the other broker for a response. Try to get it in writing to be sure your offer was actually delivered. If you still get no response go directly to the seller. Without more detail it's hard to talk about the different options available to structure a deal. However if the the building is suitable and you have the capital, a simple, straight forward deal would leave you time and energy to concentrate on your business and not the real estate.
How can I talk to the owner when he has a realtor? Is it taboo to talk to an owner of a building while going behind the realtors back? I do not want to rock the boat on this deal, it is a really good property that just needs better management, and an update.
Yes, it's taboo to go behind the listing brokers back and try to communicate, IF the listing broker is doing a good job communicating back to you or your broker. Not that it never happens.
I think you should communicate to the listing broker you may have an interest in purchasing. If he is not willing or able to communicate that, look in tax records and on the internet to find the owner to contact them direct and ask if he'd sell. He may be relieved.
If you need the capital, bring in a local investor to JV with you. If it's a good deal as is and the investor has you as an additional tenant, it should make some good sense and finding an investor to JV with shouldn't be a problem.
In most states, the listing broker has a responsibility to show all offers, LOI and most communications from a potential buyer to the client (seller). If a sufficient amount of time has passed and you have no explanation from the seller's broker for the silence you can suggest to that broker that there is a break down in communication and that you do not desire to circumvent his positions but you will go directly to the seller for a direct answer.
If that does not get a response go to the seller.
Hi Jeremy, I hope this goes without saying, but you need to get a commerical broker of your own. If you've never done a commercial deal before it's going to be difficult for you to evaluate and master the terms on your first go. I list and lease lower mainly C class commercial properties and most of the tenant's/buyers have no rep and no real ability to negotiate simply because they don't know how the game is played. I cringe at the terms they readily accept, but I have keep my mouth shut since I represent the landlord. The seller will pay your rep's fee so it's not going to cost you anything.
Thank you everyone for your help and understanding in my situation. I will contact a local Commercial Broker and see what I can work out, will also be looking at possible investors to do a JV with. Hopefully I can find one, I have found numerous properties in the area that I think could be managed better and get some good people in them as long as they are updated. A lot goes for saying the way these buildings look and the reason they are vacant. I hope to be able to do something soon, but since I do not have experience it may be hard, I will keep everyone updated here. Again thank you for your help on both issues with selling and renting commercial properties.
Jeremy, you may have already found someone, but if not, I was born and raised in West Des Moines, and can point you in the right direction to either a broker or potential JV partner. PM me if you're still looking. Thanks!
I'm a bit confused. Do you already have an agent?
If not, I'd suggest getting a list from loopnet and just start calling commercial realtors. If you call 20, you might find one that is knowledgeable, willing to teach you some things, and be reasonably responsive.
If you do, its fair to ask the status and continue to press forward if either realtor is not.
On another note, all my offers are "upon presentation" offers. No one needs days to decide if they want to sell or lease something they've already listed.
For my partners company we do have our own agent, however I need to find one for my business of real estate. I have been talking with one from Remax Solutions. She is doing great. I have found a property downtown that I am extremely interested in, it has 42 apartments, 6 retail storefronts, 8 office suites, it comes with a cell tower and a billboard on top as well, so the potential for extra income. I am waiting on documents to sign so I can see more on the property, once I see the numbers I will decide whether or not to continue. I would need a cash or credit investor to go in and help me with this property, as it is more than I expected, but it is in a great location and lots of room to grow with improvements I'm sure.
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