My assignee wants to see what I have the 40-unit tied up at

The two buyers threatening to wait you out are telling you something about your contract, not about your fee. How long is your inspection period and is the earnest money hard? If you've got 45 days free-look and 5k soft, waiting you out is basically free for them. If you're 15 days with 50k going hard, the math on waiting changes fast.

I'm still building a buyer list so take this as a list-builder's observation. The commercial buyers I've talked to don't actually care what you make. They care whether the number they pay pencils at their required return. The ones who argue about your fee are usually the ones who can't make the deal work at your price and want a discount out of you instead of admitting it.

Where does the 6.5 cap come from? If that's your own guess rather than something you can point to in traded comps, the whole 3.8m is soft and buyers will sense it.

I hit the same wall on a much smaller retail strip. What actually moved it was giving the buyer a full rent roll, trailing 12 operating statements, and a written note that the assignment fee was X and was payable at closing from buyer funds. Once it was stated flatly and early nobody argued. The deals where it blew up were the ones where I tried to keep the number hidden until the last day and the buyer felt handled.

Sorry, basic question from someone brand new. Does the estate know you're planning to assign rather than buy it yourself? That seems like the part that would upset people.

@rigging I had the same question a month into learning this. From what I've read the answer is that it depends on your contract language and your state, and that the assignment right is normally spelled out in the agreement itself. Girder, is yours an "and/or assigns" or a named assignment clause?

The probate authority question is the one I'd solve before spending another hour on cap rates. I've watched land deals sit for months because a personal representative signed something the letters didn't cover. If the court has to bless the conveyance, your timeline is not yours.

28 units at $180 under market is $60k a year of upside, and every one of those units is a turn. What's your per-unit turn cost assumption? On a building with deferred maintenance everywhere I'd be at 6 to 9k a door before I believe the new rent, and if you've priced it at 2k your 3.8m evaporates. Buyers with construction people on staff will find that in an afternoon.

Above roughly a million in purchase price the disclosure question mostly answers itself, because institutional and semi-institutional buyers finance with lenders who require the full chain of title and the assignment instrument. Your fee becomes visible whether you plan on it or not. So the workable posture is to state the fee up front and let the buyer underwrite the total basis, which is the only number they actually care about.

The double close is a real alternative and it is not primarily about privacy at this size, it is about whether the end buyer's lender will fund on an assigned contract at all. Some will not. Transactional funding at 2 points on 3.1m is 62k plus a second set of title, recording, and any transfer tax, and transfer tax treatment of a double close varies by state, with some states taxing both legs. Price both legs with your title company in writing before you decide, and confirm the underwriter will insure the second leg the same day.

On the harder point, your 3.8m rests on 28 units achieving the new rent, and @harrow is right that the turn cost is where that number lives or dies. A buyer will underwrite the lease-up period too. Twelve to eighteen months of partial vacancy while you turn units is real lost income that comes straight off what they'll pay.

The probate issue outranks all of it. If the personal representative's authority is limited, your contract may be unenforceable against the estate, which means both the assignment and the double close have nothing underneath them. Your attorney reviewing the letters is the right step, and that is a question only a licensed attorney in that state can answer.

The number I'd want from you before quoting a fee is trailing 12 expenses, not proforma. Estates run buildings badly and cheaply at the same time, so the reported expense line is often low on maintenance and high on nothing else. If real expenses are 4 points of margin worse than the statements show, the 6.5 cap value drops well under 3.8m and your spread is the first thing to get squeezed.

Reading this thread as someone with zero deals, the thing that surprised me is how much of the work is contract mechanics and probate rather than finding the building.

For anyone following along who is newer, a few of the terms in this thread do specific work.

An assignment is when you transfer your rights under a purchase contract to someone else for a fee, so the new party closes with the seller in your place. A double close is two separate sales, you buy from the seller and then sell to your buyer, usually the same day, which means two sets of closing costs. Transactional funding is short-term money that covers the first purchase for the day or two between the two closings, priced in points, where one point is one percent of the amount borrowed.

Cap rate is the shorthand commercial buyers use for value. Take the property's net operating income, which is income after operating expenses but before loan payments, and divide it by the price. A 6.5 cap on $250,000 of net operating income implies about $3.85 million. That is why everyone in the thread is arguing about expenses and rent rather than about what similar buildings sold for.

One thing worth understanding early is that whether you can advertise or assign a contract like this, and what you must disclose to the seller, is set by state law, and several states have tightened those rules in recent years. North Dakota's rules now reach all real estate rather than residential only. Before you put a commercial property under contract with the intent to assign, have a local attorney tell you what your state requires of you in writing.