You’ve heard this story before: Beloved local businesses get displaced by a property sale or rising commercial rents. Our founder and CEO experienced this first hand when his parents’ Brooklyn grocery store was forced to close after 20 years in business when their landlord doubled the rent overnight.
One way for small businesses to secure their space and their future is by owning their commercial property—the problem? Small business owners often lack the capital needed to pay for the 10% down payment on a mortgage.
At withco, our mission is to help small business owners become property owners. We do this by employing a lease-to-own model that helps small businesses earn their down payment while leasing their property.
But how exactly does lease-to-own work? Below, we break down the following:
At the most basic level, “lease-to-own” refers to an agreement that allows the tenant to eventually purchase the property when the lease runs out. This process is meant to give tenants time to acquire the capital needed to fully purchase the property, while offering them the security of knowing the space is theirs for the course of the lease.
What’s different about withco’s lease-to-own model is that tenants actually earn a down payment over the course of the lease. This means that each time a tenant pays rent, they earn a percentage of the down payment needed to take out a mortgage on the property. At the end of the lease, withco gives the tenant the total amount they’ve earned—a minimum of 10% of the purchase price—allowing them to purchase the property from withco.
We do all of this while still charging a fair market price for rent—most of our partners pay rent consistent with what they were already paying, or only slightly more.
withco’s lease-to-own model is the simplest and easiest way to purchase commercial property. We help local business owners purchase their current space, find a new location, or expand to multiple locations.
There are typically three types of lease structures for commercial properties:
withco’s lease-to-own model operates as a “triple net lease” (or NNN) during the five-year lease term, but it adds the stipulation that the tenant can purchase the property at the end of a lease at a predetermined price while earning a down payment over the course of the lease.
Our “lease-to-own” model may at first sound similar to a common residential market offering known as “rent-to-own.” The main difference between our offering and most “rent-to-own” models is that “rent-to-own” agreements typically charge you more in rent, take the difference you pay over time, and then put it towards your down payment.
With our lease-to-own partnership, you’ll never pay more than market rent due to the cost efficiency we’ve built into our model. While most landlords bake the risk of vacancy into their rent price, withco avoids this risk by only working with only the best local businesses. This allows up to 30% of your rent to go towards earning your down payment. At the end of your lease, withco will gift you the full down payment amount.
Our lease-to-own model is the easiest path to property ownership for business owners who don’t have access to the cash they need for a down payment on a mortgage, don’t want to tie up their cash in a single asset, or simply don’t have the time and resources to complete a complex transaction.
In short, the benefits of a lease-to-own model are directly tied to the benefits of owning your property, which are many:
Before we sign a lease agreement with any business, we undergo a thorough review of the business’s property and finances to ensure the small business owner is ready for property ownership.
We use a broad range of factors to determine eligibility for our lease-to-own model, but generally speaking, we work with small businesses who have already demonstrated a strong level of success and are ready to own their property, but don’t have the cash for a down payment. Here’s a breakdown of what we consider:
As a commercial real estate investor, withco is actively purchasing small business properties nationwide that are valued at less than $5M. Have a property you think we’d like to buy? Check out a list of our recent transactions below.
Once our partners complete their five-year withco lease, we help get them set up with a loan or mortgage so that they can purchase the property from us using the down payment they’ve earned.
The most common loan our partners will use is a Small Business Administration loan, but this isn’t the only option. As always, we’ll be by your side to navigate this process and ensure you can successfully purchase the property from us.
Ready to get started with the easiest way to own your commercial property as a small business? The first step is to reach out to withco, and one of our partners will be in touch with you directly to determine if you and your property qualify.
You can also always email us if you have any outstanding questions before getting started: firstname.lastname@example.org
We couldn’t be more excited to help more small businesses become property owners!