A step-by-step guide to withco’s lease-to-own partnership

Mel Hahn
sba 504 loan commercial real estate
Published on July 11, 2022

Lease-to-own is the simplest and easiest way to own commercial property as an entrepreneur

Want to own your commercial property but don’t have the money to put towards a down payment? Or perhaps you want to own your space, but you just don’t want to tie up your cash in a single asset? Or maybe you just don’t have the time or resources to see through a complex real estate transaction. 

Enter withco. Our lease-to-own partnerships help the best business owners become commercial property owners by helping you earn your down payment over time—you could own your property in just five years time! 

But how do you get from start to finish? Below, we’ve outlined a step-by-step guide to withco’s lease-to-own partnership, from determining eligibility to purchasing your property. 

Learn more about our lease-to-own model here

Meet withco partner OJ Wilkins, owner of The Carriage House in Jefferson, GA.

Step 1 — Tell us about your business  

First, we make sure your business is qualified for a withco partnership and determine what you can afford. At withco, we are looking to work with businesses who demonstrate financial success and are ready for property ownership. 

We’ll also want to understand your real estate goals. Our lease-to-own model works for the following scenarios:

Stay: You love your current property and want to stay there long-term. We can help you secure the real estate you currently occupy as long as it fits within your budget. 

Move/Expand: Looking for something new? Whether you are relocating or expanding to more locations, we will gladly help you search for the perfect property for your business based on affordability and your property wish list. We’re happy to connect you with our network of trusted brokers, or you are welcome to use your own. 

Ultimately, we always want to ensure that you’ll be able to successfully purchase your property at the end of your withco lease. 

What do I need to qualify? 

In order to understand whether you qualify and what you can afford, we will need access to the following documentation so that we can underwrite your business: 

  • Your current lease 
  • The last three years & year-to-date financial statements: balance sheets and profit & loss documents 
  • The last three years of tax returns  

With this information in hand, our team will be able to make sure you’re ready for a withco partnership.  

Step 2 — Sign withco lease agreement

After your business and space are determined eligible for withco partnership, withco makes a fair and competitive all-cash offer on the space. Once the offer is accepted, we purchase your property and become your landlord with a five-year lease. The lease terms will have a predetermined rent price with annual increases (usually around 3-4%) and the eventual purchase price will be set from the very start. 

Benefits of a withco lease include: 

  • One of your largest monthly costs is now an investment 
  • Make updates to your space as needed 
  • Rest assured that you won’t be sidelined by a change in ownership
  • Surety in budget on 5-year lease and future mortgage payments 

Learn more about withco’s triple-net lease-to-own model.

How does withco determine purchase price? 

We use a combination of qualitative and quantitative analyses to determine the future purchase price, including recent and historical data on real estate appreciation in the area, expectations of future market conditions, and broader real estate market data. We then fully underwrite the property and perform the required diligence (e.g. inspections, appraisals) to ensure our valuation is correct. We work hard to set fair purchase prices for our partners and you’ll always know the predetermined purchase price from day one on your lease agreement. 

When you partner with withco, you'll always know the future purchase price of your property from day one.

Step 3 — Earn a down payment 

Once the lease agreement is in place, you pay rent to withco—just as you would with any normal lease—only now, around 30% of your overall rent will go towards a down payment that will enable you to purchase the property at the end of the lease term. In exchange, withco asks you to share your business’s financials on an ongoing basis so that we can work together to ensure you’re ready to purchase the property when the time comes. 

Will my rent increase with a witcho partnership? 

Our success is your success, so you can rest assured that our rent prices will be fair for your budget, property, and local market. 

Step 4 — Purchase your commercial property

At the end of the lease, withco gives you the down payment credit that you earned so that you can take out a mortgage on the property, effectively buying the property from withco! Now, you’ll be able to enjoy all the benefits for commercial property ownership, including: 

  • Take control of your space for the long term
  • Become your own landlord and maintain your space on your terms 
  • Leverage your property to access more capital 
  • Generate long-term wealth from real estate value appreciation  

Learn more about the benefits of commercial property ownership

What kind of loan will I secure? 

Most withco partners secure a loan from the Small Business Administration (SBA) because they are more likely to work with small businesses like yours, but they certainly aren’t the only option. You are welcome to shop around and find the right lender for you—we’ll be here to help guide you along the way. 

Ready to secure your future and own your commercial property?

Get in touch