Hey guys. I own a business in middle TN and since inception in 2007, we have all had home-based offices. We have now grown to the point where we are looking at office space.

I found a great building nearby that has 3 suites--the middle suite is available and the entire bldg has been for sales for nearly 2 years.

If I have done my math correctly, the rental income from the tenants on the outer two suites would cover my mortgage payment for the building, so essentially we could move in and have an office "for free".

The owner is asking $1.15 million or so, and has not come off the price even though it has been on the market for a long time. In addition, I have only about $50,000 set aside to put down. That includes down payment, closing costs, due diligence fees, etc. I may can scrape a little more but I don’t think it would be substantial.

Any advice on creative ways I can get in this bldg. without putting the typical 20% down? There is no way I can come up with $200k+. But, I can’t imagine buying another building and being the sole occupant when this bldg. is available and the other tenants will basically pay my mortgage for me. I think the owner may be willing to finance 10% or so. The leases on the outer two suites expire in 2-3 years, but they should re-up based on past history.

Would welcome any suggestions or advice on how I can make this work.

What is the size of this building,age,type of construction??

Does it come with land that could be redeveloped for a higher use??

Are the leases signed coming due in a few years based on rental rates of the boom times??Usually when they come up for renewal office tenant is looking at getting lower rent or they will move to a better location.Many businesses are down sizing so you expanding in this economy is not the norm.

In Atlanta we have a 20% Office Vacancy.Many businesses are reducing employee footprint from 600 sq ft to 300 sq ft per person and then having the stay at home some days as well.

You could do a WRAP with the seller subject to the existing mortgages with some down and have a balloon note due in 1 to 2 years where you cash him out.

Say 6% with a 30 yr am.

You really need someone to help you with this.The seller would have to look at foreclosure laws for their state and if they owner financed you and you defaulted would your down payment cover their recovery of the asset costs.

Good advice - not enough information here to make a decision. Have you seen the building expenses? Running a property with tenants costs $$$, and the mortgage alone is only one expense. I've seen buildings that cost $1M, had $100,000 in income and looked great until the expenses were shown to be $120,000/year!!! The building lost money before the mortgage was paid!

But, it's been a while since the OP posted this and he hasn't responded, so I bet he's moved on.

Hey guys. Havent moved on. Have been exchanging PM's with Super Realtor.

I think I may have stumbled upon a solution, and that is an SBA backed CDC 504 loan program. Helps small businesses like mine purchase buildings, equipments, etc. Talked to the local CDC director today and things are off to a positive start.

Yes, I have looked at the expensese and have copies of the lease agreements for the other two tenants. They have NNN leases and CAM is charged back, so the rental income from them does indeed cover the mortgage by a good bit.

Hopefully this 504 loan is the answer but if not I am sure I will be back here asking for more advice!