| Investor? -- Owner User? -- How About Both? |
Does this describe your dilemma?
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You have leased your business space for years. Your lease expires soon.
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Your business is growing. You need more space now.
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Your growth will continue. You need even more space for the future.
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You have capital available. You want to buy your next business space.
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You would like to “buy for your future.”
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You don’t have enough capital or cash flow to "go-it-alone" - yet.
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Think about becoming your own landlord AND being the tenant landlords dream about.
Think about becoming an owner-user-syndicator.
The principle is simple - the details complex. (Sounds a lot like life, doesn't it)
With "a little help from your friends," buy a property that is "too big" for your current needs and lease out the excess space. You are now the landlord of a property that is every commercial property owner's dream: A rental property with a secure anchor tenant. Best of all, you will always know your anchor tenant's finacial condition - since you are your own anchor tenant.
CCSR helps you with the details. CCSR works with your securities attorney and registered investment advisor (RIA) to craft the documentation necessary to complete the process and find funding for your project. (Sorry, we cannot - and will not - do this alone or assist you to "do it yourself." If you do not have a qualified attorney or registered investment advisor we will be happy to recommend one.)
A commercial internet website is not a great place to discuss the ins-and-outs of securities law, but these are the basic tasks that will bring your project to fruition:
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Identify a property that meets your needs (location, configuration, amenities, ...), that is much bigger than your current or future space requirement, and portions of which can be re-purposed for rental to other businesses
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Form an entity to serve as the investment vehicle and hold the property (This will usually be a pass through entity such as a limited partnership, S-corporation, or LLC - talk to your accountant and attorney about which is best for you.)
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Option the property and assign the option to the entity
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Develop an offering package that meets SEC and state securities registration exemption requirements. {This will usually consist of (at minimum) a private placement memorandum (PPM), an operating agreement, a subscription agreement, a non-technical business brief, and agreements that clarify your role as manager and anchor tenant.}
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Raise capital using the offering package, being careful to stay within the SEC and your state’s securities registration exemption guidelines. (You and your registered investment advisor are the key players in this process that may take anywhere from a few days to "how-long-ya-got." It is almost always the "rate determining step" in your project.)
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Decide how you will optimize debt & equity. Establish lender relations, pitch your project, take and evaluate offers, negotiate and finalize your non-equity financing. Complex projects often require several rounds of financing {acquisition, development, construction, and permanent (“take-out”) loans} and multiple lenders or finance instruments {e.g. primary, subordinated, mezzanine, and gap financing}.
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Exercise your option, close on the purchase, and run the property
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– This isn't cheap, fast, easy, or assured financing. (Up front costs are generally higher than up-front borrowing costs, and there a lot of hoops to jump through.)
– Your "partners" share in the appreciation (There may be more of it to share, and managing member investors usually achieve greater rates of return than conventional investors. Arguably, the managing member earns every penny of their return.)
– You take on management responsibilities for the property but you give up absolute discretion over the property and its operations.
Why go through all that?
The owner-user-syndicator model helps you:
– Achieve your growth goals (permits you to expand as-needed, as-able.)
– Preserve your working capital (with less capital invested in facilities, you can devote more capital to your core business)
– Leverage your financial resources (your "partners" and your lender contribute their capital - increasing your buying power)
– Improve your balance sheet (creating the "solid assets" investors and bankers love to see)
– Diversify your portfolio (diversify across asset classes and income sources)
Only you can decide if the trade-off is worth it.
CCSR helps you decide and takes some of the workload off your shoulders (Sorry,,, not all of it.) .
CCSR works with:
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You - to locate and option your property
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You and your attorney - to develop your documents and agreements,
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You and your registered investment adviser - to market your securities,
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You and your lender - to finalize your financing
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You - to exercise your option and close your sale
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You and your new entity - to establish and maintain efficient business systems and manage your property
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| To discuss how CCSR can help fulfill your business or investment property needs fill out our website form, call us at (909) 625-0501, or E-mail us (info@ccsrinc.com).
To ask general real estate investment questions click on the Message Board icon located on every page of CCSR's website. (Items posted on the message board are visible to anyone who goes there!)
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