I know several of you are small business owners, and I'm working on that goal myself. I mentioned here a while back that I'm starting a small culinary trade school (recreational and certificate programs). The process has been long and slow, and with every small accomplishment, I find another dozen things I know absolutely nothing about :yell: So, I'm hoping to tap in on the collective acumen of my peeps. I'm set to move forward with a location. I'm undecided in so many areas about details, but one major issue that I need guidance on is whether it is better to lease or own? It seems to me that the lease prices are very very high, and I'm warned CONSTANTLY by everyone about this friend or that who got screwed by their lease. I've also never rented anything before in my life- literally. I bought my first house when I was 20, so the entire concept is foreign and scary. I also don't understand all of the ways that landlords can help improve a property (my dear friend's restaurant was given $600,000 for HVAC, flooring, and a bunch of other structural items) but that MUST be uncommon right? I mean people don't go into a lease negotiation assuming that the owner will throw money into a project, right? My first choice is our local mall, second choice is a strip mall. I want foot traffic. Buying- I could buy. Property is not very expensive where I live. I could get a building for about $200,000 in an area I "sort of" want. My credit is excellent. Down side- then I'm paying taxes, shelling out a huge down payment that I'd otherwise need for the build out, taking care of everything from the inside out to the parking lot. Down side #2 is that I wouldn't be in "the" area I want- which is the mall. Would anyone care to share their own personal experiences with buying vs leasing, and if you'd do it differently- why? I should add I also have good advice from our local SCORE, but those guys are very optimistic lol.
You sound like a good candidate for a lease-option arrangement. Typically, you approach the owner, who may not have thought of this or even know what it is, proposing that you will lease the building for $X per month for, say, two years . . . and that any time during those 2 years, you can buy the building for a agreed-upon-now price of $Y . . . and that some agreed percentage of your lease payments will apply to the purchase. As a seller, I've done this twice, once with 50% of the lease payments going to purchase, once (I was pretty desperate to leave Nashville) with 100%. Both times, the lessor exercised the option and bought, and all were happy. And the one time I did it as a tenant/potential buyer, it was for a new business notion, and after a year, it just wasn't working well enough, so I did not exercise the option, which felt good. I learned about all this stuff from the excellent real estate writings of the late Robert Bruss, real estate attorney and newspaper columnist. Do a search for him and "lease option" or pick up one of his books for a few bucks used at bookfinder.org. Good luck. John
