I have business that is small in size, but it does ok, not great. It's a small building on 13,000 square feet lot. The building and lot sit are on a prime location, near downtown. I want to lease the property, however, my Tax Returns do not reflect how good the business is. How do I get around this? This would be a prime location for a McDonalds or a similar fast food restaurant, and I'm sure they would destroy the building and rebuild anyways. Any ideas on how I should proceed?
I'm not sure what you are saying here. Are you saying your tax returns do not reflect all of the income your business generates? Or, your tax returns don't do a good enough job of explaining because of all your expenses, deductions, etc.?
If you want to lease out the space, I don't think it would really matter how well your business did -- There are many situations when you have prime real estate (near downtown) but the business that is there is just horrible because of how it was run, or there just wasn't the demand. If you're trying to sell the space that really shouldn't matter. What should matter more is the area, the size of the space, the price you're asking, etc. If you're asking how to proceed leasing it out...I guess you would just list it with an agent or something?
I was thinking along these lines. I'm in an odd situation, because the value is not in the small 500 sqt feet building, rather it's the 13,000 sq fit lot. I doubt the building will get many takers (it's oddly built and way too small), however, the 13,000 sqt is a goldmine. I basically want to lease the entire lot. The new occupants can do what they want with the building. I'm just not sure how to put this to market.
don't have the money or resources at the moment. In order to make it bigger, I would have to tear it down and rebuild it.
Tear it down and sell/rent it as land and you will get many offers if the place is good in real estate - it doesn't matter how is the land used - things that matter are location/area size and finally the potential buyer since there is a buyer that has a project in his mind that fits the land area and location and he knows he will make good profits there so he will be interested in paying high to get it Good luck
So it seems you want to lease the real estate. If you want to sell the business also you can sign a provision that if the business does not gross a certain amount you will refund a portion of the sales price. Risky I know but when your income taxes are understated there is little else to do other than to operate the business for a full tax year and report revenue accurately.
How is your property zoned? If it were zoned for office, then it might be harder to target other business types with a lease or sale. You could seek a variance and/or rezone the parcel, but depending on your city/boards, this may be difficult. If the building is not suitable for most businesses, maybe it would be time to look at a sale of the property. Someone like "McDonalds" would come in and pay for the land AND your business then rebuild to suit. If there is a genuine need for fast food in that area, and your property will support it, maybe you should contact corporate headquarters about your idea. When it comes to expanding in a prime area, they normally are all ears. Should you decide to sell this business in the future, I would try to keep accurate records of your income. Sure you will have to pay more taxes, but if your books don't support the asking price your going to be looking at a land sale only. Good luck
The business was not run very well in the past and the accounting wasn't maintained properly. I could not sell the area for another year and find another manager to take care of it, but I'm looking to put this to market now. It's in a great location that is rapidly growing. 70,000+ cars drive through the area on a daily basis, it's right off major highways, near downtown. There is also a large residential area and a large university near by, with a lot of walk-by traffic. It's zoned for pretty much any kind of business right now.
What about getting a commercial mortgage to finance knocking the building down and building a new one? Or you could partner with a property developer, they'll pay for everything in exchange for shared ownership of the building usually.
How the original business did is irrelevant if you're just trying to lease the property. Get a real estate broker to try to lease/sell your property for you. If it's that good of a spot then he'll find a taker quick enough.
With commercial lots/property, is it typically best to go through a real estate agent or an attorney when trying to lease?
If you are leasing the building then the current business you are running has no bearing on the lease or estate value especially if the new owners wants to run a completely different business. Get your property professionally evaluated. That should you some crebility. People who would want to lease the property would not care what your former business is as long as it does not attract any undesirables. They will care about traffic, if it meets their needs and if the price is right.
I would go ahead and take down the building and clean the lot. I am not an expert on this, but it should only cost around 5-10grand to do Then after that, go ahead and just leasethe lot in 5 year contacts good luck in your endeavors
Well, the business does provide a good revenue stream right now, which is nice since I'm in massive debt. At the moment, I can't afford even the 5-10K that it would cost to take the little building down.