A buried right of first refusal can eat a wholesale assignment fee entirely

9.56 in place going to a buyer at effectively 9.29 after your fee. What does the buyer's rollover schedule look like? Four tenants in 31,000 sf means that if two roll in the same 18 months, the in place cap is a snapshot and the real question is the weighted average lease term. Also worth asking whether the $196k NOI had a management fee and a capex reserve in it, or whether the estate was self managing for free. Estate deals almost always carry a phantom management line, typically around 4 percent, that has to be added back before the cap rate means anything.

31,000 sf of 1980s flex means roof and pavement. Did the buyer price those or just take the inspection report and move on?

The ROFR timing is what I'd want to understand better. You sent notice day 18 with a 15 day clock inside a 45 day inspection and $25k going hard at day 30. So the waiver landed on day 30, the same day your money went hard. That's not margin, that's coincidence. Did you have a written agreement to extend the hard date if the ROFR clock ran long, or were you just going to eat the $25k?

How did you find the buyer for this, and how long had you known them before the contract? For anyone building a buyer list, the open question is whether the buyer for four tenants of industrial flex is a different person entirely from the people who say they want small multifamily, and this deal reads like a useful data point on that.

Any excess land on the parcel? Flex buildings from that era often sit on more dirt than they need and the zoning sometimes allows another building. That can be worth more than the improvements in a market with a logistics story, and if you did not price it, your buyer might have.

What was your actual out of pocket before closing? $25k earnest obviously, but I'm trying to work out what a deal this size costs to chase if it dies. Legal, inspection, travel, whatever you spent on the estoppel process.

Here's what bothers me about the numbers. The spread from $2.05M to $2.11M is 2.9%. Your $25k was hard for 15 days and your downside if the buyer walked was the full $25k plus costs. So you risked roughly $30k to make $60k on a deal where the ROFR alone could have zeroed you out through no fault of your own. That's a fine bet once. Is it a repeatable one, or did the fee happen to be big enough this time because the building was?

@hannah_west29 the size is the point though. The paperwork, the 45 day window and the weekly phone calls are the same on any size building, and the fee scales with the building. The labor math is identical on the service side of the business: the process cannot be afforded on a small job, and the big one pays for the whole month.

Who actually chased the amendments down, you or the attorney? I'm interested in the service side of this and "person who reconstructs a lease file for a commercial seller" sounds like a job somebody would pay for.

The bit worth underlining is the third ask. You asked twice, got nothing, asked again and a bookkeeper found a folder. Most people stop at two.

Did you consider just buying it? $2.05M at a 9.56 with a real market underneath it sounds like something people would fund. I ask because I keep meeting operators who assign deals they could've kept, and I've never gotten a clean answer on why beyond not having the capital that week.

The answer, @stephen_ok9, is usually that the fee is certain and the hold is not. Operators who keep a building they should have flipped tend to learn in the third year what the roof actually costs.

For anyone who wants income without a second job, the work packed into those 45 days is a full job. No criticism of the deal, only a note on what kind of strategy this is.

The 2019 amendment is the interesting document, and its exact wording matters. ROFRs come in two flavors, a true right of first refusal that triggers on a bona fide third party offer, and a right of first offer where the seller has to shop it to the tenant before marketing at all. If it was the second kind, the estate may already have been in breach by listing it for seven months without notice. A signed waiver cleans that up for the buyer going forward, but it does not necessarily clean it up between the tenant and the estate. How that plays out depends on the language and the state, which is an attorney question, and it sounds like you had one. Did the waiver cover past conduct or only consent to this sale?

@ehernandez74 that is the sentence worth writing down. Get the permission before anyone knows what it is worth.

Was the end buyer using a lender or paying cash, and if there was debt, did the lender have anything to say about the assignment fee sitting on the settlement statement? Lenders split on this. Some do not care, and some size the loan off the original contract price rather than the assigned one. It comes down to the individual lender, and the answer belongs in writing before closing.

Working through my licensing coursework right now and this thread is more useful than the chapter on agency. One thing I'm chasing down with an attorney before I ever try this, whether assigning a commercial contract in my state triggers a licensing requirement at all. My instructor mentioned North Dakota's 2025 law extended wholesaling requirements to all real estate transactions rather than residential only, which surprised me, because I'd assumed commercial was outside all of that. Apparently not everywhere.

The estoppels in week one is the part I'm stealing, even for a fourplex.