Quote:
Originally posted by ed martin
If your going to negotiate a leaseback or rentback, you should negotiate that up front, before you make the deal. Leaving the terms of the leaseback open at the back end of the deal leaves you pretty vulnerable. Furthermore, the buyers costs should have no bearing as to what he should charge for rent. You should not pay more than what the market would bear. It's like someone customizing their Porsche, spending a ton of money and asking the a buyer for reembursment. You know how that story goes.
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I understand that and in theory you're absolutely correct. But if the buyer has a ceiling out-of-pocket expense of $850k then the less the Realtor gets the more is left for us.
Plus the buyer wants to lease back at a rate that supports the debt he has incurred in the acquisition. Therefore the commission is included and the higher it is the more debt he must support via my lease payments. He IS going to factor this in, so I must consider it.
The rent setup is actually pretty fair and is less than I pay now. He wants 8.5% of his cost of acquisition returned each year(say $850k * .085 / 12 = $6,020 a month).
If I push for fair rent........I'll end up paying more
This how he wants to control his investment, he's going to spend the $850k, the only question is who gets what.
The Realtor just dropped off another offer an hour ago and he lists 7% commission paid by the buyer. The idea of him making $56 large for middling the deal makes my head spin.