How to make a low offer appealing for a small commercial property
I’m looking into purchasing a small motel that has been on the market for a while and want to figure out a strategy to purchase it at a lower price.
Details:
Asking $240k. It was listed at 280k a few years ago, and the current owner bought it for 225k about 15 years ago. My ideal price point would be 180k. Due to piss poor management/hospitality, the business only brougt in about $170k in revenue over the last 3 years. My price target would still be over the 3x revenue target that most small motels go by.
Both I, and the seller are out of state, but I do have family in the area. The owner shut the business down in March. He is managing a larger property out of state. He is trying to sell both and retire.
Ideally, I’d like to have a few weeks off from work to get it up and running. While the property doesn’t need any repairs, I’d like to repaint the walls, get rid of the tube TVs, and other minor interior updates.
I’d be able to take a month off of work about 7 months from now, which would be an ideal time to buy it. If my low offer is accepted, I could probably get a few days off to get it up and running, and make the updates later when I can take more time off.
Would it hurt to make an offer at $170k now?
What can I do to make a low offer appealing? Is there a preapproval letter for commercial loans that I could get to make my offer be taken more seriously? I’ve already walked the property with the listing agent.
Any advice is greatly appreciated.