In a Sale-Leaseback, the owner sells their property to an investor and then the owner leases it back from the investor for an agreed upon period of time.
Build-To-Suit To Own
Under the Build-To-Suit To Own option, the owner agrees to develop or finish the property or space to the specifications of the user/buyer and the user/buyer buys the completed project from the owner.
In a Straight Sale, the property owner usually transfers the deed and title to the property at closing where the buyer pays the agreed upon purchase price in full.
An Exchange (also known as a “1031 Tax-Deferred Exchange”) is a sale in which some part or all of the proceeds received from the sale of real property are used to purchase a replacement property or properties and the capital gains taxes otherwise due on the sale of the relinquished property are deferred for the seller who initiated the exchange. There are very stringent guidelines and timeframes which must be scrupulously followed to successfully complete an Exchange and the seller should retain the counsel of advisors specifically qualified for and experienced in the property exchange process. We refer our clients to such qualified and experienced Exchange advisors.
In an Installment Sale, the buyer usually gives the seller a down payment for a portion of the purchase price and the balance of the purchase price is paid to the seller in interim payments (i.e. installments) over time. An installment sale may help a buyer (and therefore the seller) complete the transaction if commercial financing is otherwise difficult to obtain since the seller is, in essence, financing the purchase for the buyer. An installment sale may help a seller defer a portion of taxes which might otherwise be due in full upon a straight sale. Although an installment sale may not provide the level of capital gains tax deferral achievable through an Exchange, it does not require the seller to locate and close on a replacement property which might otherwise be difficult to find, especially within the short time frame required by an Exchange. The installment sales agreement should define when the deed transfers to the buyer.
With Seller Financing, the seller usually finances a portion or majority of the purchase price for the buyer. If the buyer takes out a loan for part of the purchase price from a commercial lending institution, and if the seller is also providing financing to the buyer, then the seller’s loan is usually subordinate to the commercial loan. In other words, the commercial lender usually has first lien rights on the property, securing the loan.