Commercial Real Estate Investment/Vacant land purchase for resell

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Expert: - 7/7/2008


Question
Hi Jim,
I would like to "lock Up" a vacant parcel in my area that I believe would be of interest for purchase by a Large corporation. Simply put, it will be a flip. Is there a strategy I can pursue with minimal if none of my own capital ?
I've already considered wording the contract with my ability to assign the purchase contract to another
Thank you
Patrick

Answer
Patrick-

Either earn a commission by getting a limited exclusive from either the buyer or the seller to purchase or sell the property to a specific non-disclosed party that you will disclose within a very limited time (you must make the time-frame specific, and the seller or purchaser will assuredly require that it be an abbreviated period) following the execution of the limited exclusive.   

You can try to consummate a contract to buy the property, but that will be tough.  It will be difficult for you to put the property under contract because the terms can so easily become legally entangling.  Most sellers will do a detailed background check on you and your past dealings to see if you appear to be someone who can perform on buying the property.   You know how you will appear to the seller on that level.  Sellers like to deal with buyers that have a reputation for following through on their contracts - and aren't simply trying to flip their property.  Expect that the seller will require some significant amount of at-risk deposit to match the risk they perceive they are taking.

My guess it that the assignment language will act to make the seller more cautious and make the chances to actually be successful with what you suggest much more difficult.  

Good Luck.

-Jim  

Commercial Real Estate Investment

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Jim Avancena, CPM

Expertise

Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.

Experience

Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

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