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As a real estate investor, why would I consider a sale-leaseback?

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You will often see sale-leaseback transactions with builders or companies with high-cost fixed assets like property, land or expensive equipment. As a buyer/investor, you can purchase the real estate and lease it back to the company occupying it for a long-term lease and a set price. A sale-leaseback transaction benefits both the purchaser and seller of a property.

Benefits to buyer:

•Establishes a long-term lease with a built-in tenant. 

•Generates immediate cashflow.

•Provides a predictable and secure return on investment.

•Creates possible deductions and tax credits.

Benefits to seller:

•Limits liability of owning the asset.

•Allows company to continue occupying a vital asset.

•Sets expenses for the long term.

•Makes rent payments a business expense.

•Finances an expansion of the business, purchase of new equipment or investment in new business opportunities. 

•Helps reduce debt and improve the company's balance sheet.

•Helps reduce the business income tax liability.  

Leaseback arrangements are common in the REIT industry. It is a good idea to connect with a real estate agent with a depth of investment property opportunities who understands your investments goals.

Meet the Expert

Viviana Writer is a real estate agent with Prosperiti Brokers in the Springfield, MO region providing buyers and sellers with professional, responsive, and attentive real estate services. Want an agent who'll really listen to what you want? Need an agent who knows how to effectively market your commercial or residential property so it sells? Prosperiti Brokers is a boutique brokerage with Midwest values and a national reach. The company mission is to help the communities they serve to prosper.

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