Leasing Now - Want To Buy The Building - Advice?
I own a small franchise and revenues have flatlined. Since I pay so much in rent and it will start going up annually in August, would it be smart to buy the building I'm in - w/ an 8% cap rate it is about 1.2 - or another building?
I only have $8K in business debt, but I also have limited money for a down payment, unless I took out a home equity loan. What factors are most important in commerical financing? If I got creative with 10% self-finance and 10% owner-finance, what parameters do lenders look for to hand out 80% LTV?
I currently pay around $40K gross annually. With that kind of rent, what would ballpark be for the amount I could finance? The building is around 35K sqf and 90% leased. I know the owner very well, but he currently is in negotiations with someone else - does anyone know a good method to catch his attention or interupt the negotiating?
Thank you in advance for any help!
MNInvestor
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