[Matthew Miner]

Matthew Miner

Need advice on how to handle option for commercial property.

Here?s the situation: Property currently has commercial business on it (2 metal buildings). Highest and best use is high density residential, for which it already is zoned. Seller is agreeable to option. Before I can truly come up with a price I?m going to need to do quite a bit of due diligence with builders, developers, realtors, etc. But until I have a recorded memorandum of option (given the down market, it will be a while before developers will want to do anything with this property even if purchased at nice discount, therefore the need for the memorandum).

The question is this: How do I go about writing up an option to do my due diligence without committing to a price? Should I just make the price on the high side, and include an extension clause that explains why I?m doing this and that the option price doesn?t reflect my true purchase price, but that it?s just a formality so that I can record a memorandum so I can then perform due diligence?

Thanks,
matt

[Anonymous]

Anonymous

Matt,

That’s a good question for Rene Perrin. He’s our commercial property purchase and finance expert. I’ll get him to respond to your question

Jackie