L/O On Commercial Property
I am considering a Lease Option on a commercial property that I own (it is an assisted living facility - basically a specially designed SFR). The T/B wants a 5 year L/O.
Does anyone here have experience with L/O's that run out that long and how to you figure a price for something that far in the future? Also, I would like to build in a percentage of his gross (paid to me) after the business is established...any guidelines here? Thx in advance to all.
mark
A l/o does not even need a set price. It could be tied to several indexes or even based on an appraisal of the market value of the property at that time. There are percentage leases done all the time. Just do not be too greedy.
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
If you establish the index for the price, your buyer can excercise at any month during the term and know the price .
[addsig]
I have a L/O on an apartment complex. the deal was kinda of neat. there is set price, then every month I would need to pay an option money of $1000. offcouse this would eat into my cash flow alittle. This L/O is for 8 years. also every year starting in january the sales price would increase by a small percentage say 2-3 %. I have the option to buy this anytime, the option money can be applied to the closing cost and or deducted form the sales price.
This is an Idea, that you can maybe tweak, good luck cliff