Forum Replies Created
Hey Dazzling,
Brilliant post!
I’m a novice in the IP game, but that sure made a lot of sense to me.
I’m sure there are always going to be stats out there to suggest you should either NOT invest now or INVEST now.
Cheers,
Batts
Thanks Christian,
I have read some of those for/against in Dolf De Roos book “Real Estate Riches”, but I haven’t found too much else around. Dolf has an upcoming seminar (4hrs) specifically on Commercial Property so I’ll try and attend that, and no doubt have a look at the course he’ll be selling
Cheers,
Batts
Thanks Hellman,
Appreciate your reply, you have reinforced a lot that I have read about the pros and cons.
I have read that the value of a commercial property can be somewhat linked to the lease in place. A secure tenant with a long term lease increases its value.
Is there any logic to the following:
Locating a property (like a factory) which is vacant with a motivated seller. Then either have the vendor sign a NEO (non exclusive option) for you to buy, or if not then simply try to source a tenant whilst it is on the market. Once a tenant is found sign them into a lease subject to the purchase.
Will the lender then be prepared to lend more against the value of the CP now that a lease is in place?
Also I assume that vendors of CP’s are more willing to accept ‘creative finance” terms, suck as either lease optioning or providing vendor finance?
Any feedback appreciated guys….
Thanks..
Thanks guys,
I’ll troll through the forum and see wht I can find.
There definately seems a void of information out there about Commercial – I can see why Dolf De Roos has started conducting seminars on the topic.
I suppose the positive aspect is that there should be less competition out there when buying!
Thanks again ,
Cheers,
Batts
There is no issue with banks.
With the Lease option, in its simplest form: you are renting the property out and giving the tennant the opportunity to buy it.
The conditions can be as creative as you like. The term can be as varied as you like, the price can be predetermined, based on future valuation, based on CPI or whatever.
Cheers,
Batts
I am actually living in the USA at the moment, Seattle Washington. Ive been here for 12 months, and returning sometime in 2006.
From what I have seen/read/heard the USA property market seems similar to Australia, in so much as there are boom areas and stagnant areas.
Vegas has finished its boom (where builders are now discounting prices), Florida is strong, Seattle is strong, and Reno (lake Tahoe) is rising fast. Very similar to Oz where the “sea change/retirement” locations are experiencing strong population growth.
I’d personally be a little nervous investing too much in say the Seattle as its dominated by 2 companies – Boeing and Microsoft. If one of the companies relocates or has a slump (like another Sept 11) then I can see a lot of vacant house appearing. Apparently several years ago when Boeing went through a slump there were billboards erected that said, “Would the last person to leave Seattle please turn off the lights….”
Cheers,
Batts
Hey Dr X,
Im a rank novice in the L/O market, but my thoughts:
Great cashflow, with $360 rent per week. But with $160 credited back towards the pruchase price you are providing $41,600 in credits over the 5 year term. Meaning your back end profit (minus the credits) is only $5,400. In addition are you crediting the Option fee towards the purchase price? That being the case the T/B would only need to come up with $198,000 at closing ($247,000 – $41,600rent credits – $7,400 option fee)
In the USA L/O deals tend to be structured over a shorter period of time (12 – 18months) with goal being getting the tennant buyer to the closing table in order to get a decent back end profit. Also in this scenario you are accessing your back end profit much quicker.
If I’ve got my numbers right, in your scenario you would create nice cashflow (up front option fee and high rent) but Zero capital growth/back end profit.
Cheers,
Batts
Hi Celivia,
I just read your post with great interest as i am considering the pros and cons of Lease Option strategy.
I have also read that it is possible to attach specific conditions to the “Options” contract as oppossed to the “lease” contract.
I am however a little confused with the issue you raise about using the “tenants equity”.
As far as I understand it you own the property, and therefor any equity in the property until the time the tenant decides to exercise and purchase the property. I understand that the tenant is only that, a tenant, until the day they decide that they do want to buy the property and purchase.
That being the case I dont understand how you are drawing out the tenants equity??
I am a complete novice, so if I am way off track please let me know. Its a steep learning curve.
Cheers,
Any suggestions for places to begin reseaching?
Thanks for that. I was aware of his course, but as i’ve already spend XXXXX $$ in the USA on a course/bootcamp I thought i’d just share info with those that may have done his course.
Although I will need to get contracts which are applicable in Oz (Qld specifically)
Thanks guys,
Really appreciate the contact- it makes life much easier!
Thanks for that.
i’ll drop them an email and see if they can assist.
It makes things a little difficult when I’m still over in the USA, but it’s good to get the ball rolling.
G’day all,
I have recently moved to Seattle, WASHINGTON from Brisbane and will be here for another year or so. Let me know if I can assist at all.
Cheers,
Batts
Thanks for the replies.
Now, next step!
Can any suggest a good Real Estate attorney, I mean solicitor in Qld whom is familiar with Lease Options etc.
Thanks guys..
Thanks guys,
I have the same question – why cant L/O be done in Qld?
Does it make any difference if they are done on 2 seperate documents, a simple lease or rental agreement then a free standing Option to Buy contract?
That is how they are done over here.Thanks for your time guys..
Cheers,
Batts
