Hey everyone,

I want to get some advice on a situation.

We have found the "perfect" place for our needs and would like to secure it. The problem is, we are a pre-startup company, as in we don't really have any financing yet, and we are still even revising the business plan. We plan to wrap up financing within 1 month.

This perfect place is not only a great spot, but also comes partially equipped for our needs, which would save us a great deal of start up capital.

I met with the agent and went to see the location. He claims that they just lowered the asking rent from $7,500/mo to $5,000/mo (reasonable, it is a 6000+ sq ft space). The space has been closed for almost 2 years. I told him I was somewhat interested, and he mentioned that he has been in negotiations with another party for a few (2-3) weeks, and that they are at the point of agreeing upon a price. He then told me that it is a family operation led by two brothers, and that every negotiating point is a hassle because the family can not agree, and thus negotiations are moving more slowly. He said that within about 1 more week, they would probably close the deal or drop the potential tenant (or they would drop out themselves).

I really want the space, but there is no way I can sign the lease without having funding first. I've considered offering a holding deposit for a few months, but I feel like the offer would be pointless to them considering they have a potential tenant on the other side. Also, I don't know how much BS realtor trickery is laced in his story to make me rush to a decision.

How should I go about doing this? I've read about sending a letter of intent to show interest and seriousness. To the same effect, I already requested the lease so I could "have my attorney review it." I don't want to lose this spot, but I can afford to go all in with it yet. Any advice it appreciated!

Thanks,

Martin

So do you not have any money to start up your business??

The number one reason for failure of a business is being undercapitalized.

It's sounds like you don't even have a first sale yet want to put yourself in this big space.

Without a track record you are a high risk for a landlord to rent to and nobody gives people money on a start up like this.

You need to start out small,build a successful business,and ONLY THEN scale it up.

What does that mean ?

How do you expect to tie up a property with no money? And yes there might be some realtor bs involved(although many commercial agents aren't realtors) but non of that matters. If you had money in hand, as you should, you could offer terms and call their bluff to see if they were in fact B.S.'ing. If you don't, it still doesn't matter, cause you can't offer terms. Usually there isn't alot of b.s.'n going on when there's real money up in the air. Noone has the time to b.s. You do your research and if you know the market you go for what you want or you tell the other side to kick rocks cause you have better things to do with another potential property. You MIGHT could pull some hoodoo with a residential property nowadays. You're not going to tie up any moderately decent commercial property without money, whether it be financing or cash, option money, etc.

I'd say go get that money from Charles Tagro; he's looking for a good place to go with all that cash, . . . . And we solve two problems at once.

I think you should think and work about funding your business first before funding a place. There are a lot of good places in town if the price is right. There are even owners that only says they've talked to another party so that you grab the opportunity first in an instant. If you really have to fund it, ask a private lender. They might be able to help you since they release funds in a short period of time. I just don't know if they'll approve of this situation.