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I'm negotiating a lease with option to purchase of commercial real estate.
The property has been unused for 2 1/2 years and owners appear willing
to enter a lease with option: 5 year triple net with balance as a balloon
after 5th year.
Seller's original proposal:
- 20% down payment
- $10,000 month with 20% held in interest bearing account.
All accumulated amounts plus earned interest applied toward
purchase
My counter proposal was simply -- "Try again. Monthly lease and down payment
too high."
Seller's 2nd proposal:
- 10% down payment
- $7,500 month for first 24 months with 0% held aside
- after initial 24 months, a raise in lease amont by 20%
to $9,000 and $1,500 monthly held toward purchase.
Same stipulations regarding interest.
I'd like to counter propose:
- 10% down
- $9,000 month for entire 5 year lease term with 17% of lease
amount held toward purchase. Same stipulations regarding
interest.
My counter would still give the seller close to their desired net income from the
property over the five year term (approximately $7,470 instead of $7,500) while
also allowing me to accumulate monies toward balance during the entire lease term
with a difference of approximately $37,800 to be applied towards balance.
Please send me any comments or advice you may have on my counter proposal.
Thanks!!