Say I've got 10 commercial buildings wich I let to various companies and I've got those buildings together with an equal partner right?

Now this partner and I want to split the lot up so we decide that one partner will buy the lot.
So that partner will pay half of what is invested BUT also an X-ammount for lost revenue since the other partner will no longer have the rent as income.

What is the formula to base this ammount on?

Can anyone shed some light on this please?

 

When you say splitting the ten buildings up, do you mean you both want to go your seperate ways?

 

that's the idea yes

 

I dont understand the question.

If you are buying the other person out, then thats their compensation for the lack of rent anyway surely? You wouldnt expect to sell your share and then still see a return on an investment you no longer have.

But that seems to be the question you are asking?

 

The buy out price is based on the annual gross rent, you don't simply halve the invested money and that's it.

You halve the money invested plus an x-ammount of times the gross annual rent and that's the buy out price. Just spoke to my accountant lol

 

in all honesty, this should be documented in the articles of association iirc if you are a limited company, or in a partnership agreement if you are effectively partners, and also this place wouldnt be the best place to ask as it is a car forum, i can reccomend the UKBL for queries like this though.

Http://www.ukbusinesslabs.co.uk

 

Still not making sense to me. Your saying the buy out price is based on the annual gross rent so if ive invested say Ł100k and all ten building take in Ł40k a year rent im only gonna get 40k back?

 

you just buy an accountant and let them answer the questions

 

Ah, you mean the increased value because its an existing going concern?

In which case, that is something you will have to negotiate surely?

 

Yes it's a carforum but there's all sorts on here so you never know.

FocusJohn: I said halve the money invested PLUS....

so if you have invested 100k total and annual gross rent is 40k that means half of 100=50k plus x-ammount of times 40k.

Chip: one partner wants to get rid of the other in this case, but the other isn't stoopid so isn't gonna wave goodbye to years of rent wich he would have otherwise pocketed...so in order to buy him out you make an offer of x-ammount of time the gross annual rent.

In good time that was up to 12 times!

 

I get you now i miss read it.

 

Entirely between the two of you to decide if you can reach an agreement as to what is fair then.

 

The person who doesn't want to sell should try and extract the highest amount of money possible then. Until its favourable to sell you should sit on the income that keeps coming in from the rent.

 

In the good days the formula used was 12 times the annual rent.

Now it would be a lot less, but 6 or 8 times wills till be a lot of dosh

 

Are you the one wanting to sell or stay?