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Have you ever leased a name?

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Togoodhlth

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I was attempting to purchase a domain from someone who had inherited it so to speak from his father. There is no site and it is not parked.
He wanted more than I felt the domain was worth on the open market but I am able to monetize it very well as it is one of the products my stores sell. it is a generic, single word product name.
At any rate he wanted to lease it to me for a year (minimum) with a buyout price at the end of the year. Further he wanted to participate in the profits during the first year.
So I offered to pay $600/month and 20% of the net profit with full disclosure. At the end of the year I would be able to purchase the name for low $xxx,xxx or I could simply walk away.
The amount I offered as the buy out was close to what the seller was looking for but a little less however the lease payments and the profit sharing would probably bring the total to more than he was originally looking for.

He decided that he wants to simply lease me the domain, participate in the profits and NOT sell.

He also stated that to make sure I am serious he would like the first couple of months to be low $xxxx and lower profit sharing and then lower the lease payment and raise the profit sharing.

I am wondering if I should just go ahead with it? I know I can monetize it very well. In fact I am sure I can do at least $100k per year to start however I will also be branding the crap out of the name. It will be in all types of national media and I can just about guarantee it will go to the top of all the search engines due to my content etc.

So, if you are familiar with domain leases please share your insight.

Thanks very much.

John
 

Bender

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leasing a name is not a good idea, unless you have a STRONG contract - the domain owner gets more in the end- imagine this:you build a reputable site around the domain, and at the end of the year he may decide to start a business with the money you paid him during that year AND with your work on the domain/site reputation.
 

sashas

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I have little clue about leasing, but you might want to talk to JBH about it. He can draw you up a good contract, I presume. Agree with Bender's point though. If there is a clause in the contract for the name owner to walk out from the deal, he'll have a virtual gold mine of a site that he did not develop, while you'll be where you started at in the beginning.
 

dadster

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Sounds very lucrative. But, I agree with Bender. After the year is up he has a finely developed monetized site and what do you have? You would have to renegotiate your lease and from the terms you mention "more up front from you and less as time goes on", sounds like he will be hard to negotiate with in future.

I would offer him a counterproposal more in your favor or more equitable to both of you and is he agrees make sure you have a lawyer check out the leasing agreement before you sign on the dotted line.

And remember, sometimes no matter how much we want something we are better off walking away from it.

Frank
 

Togoodhlth

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Thanks for the comments.
yes, I am most worried about the term of the lease and how it can be written in such a way where if the site is kicking butt we are both protected.
If the site is doing just OK and in the owners mind he wants to get out of the elase there needs to be some sort of buyout so that my hard work has a value as opposed to him just saying "hey a year is over and the lease is up".

If I get it to say $100k in sales the first year and have the site well indexed he would be foolish not to try and sell it. I mean if he keeps it he is getting say $1000/month plus maybe another $20k a year in profit sharing but he could probably sell it for 20 times that.

The law firm use has a intellectual property attorney so I am probably going to see what she thinks but I doubt she has run across something like this before.

Thanks again and I think I will contact JBH.

John
 

Biggie

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i leased domains before

and i can tell you that the leasee will always get the short end.

as others have stated, once you make the domain more popular, the lease fee will increase as well.
and since he wants monthly fee and part of profits, it's a sucker deal it you take it.

try to get the lease for certain length of time, without giving up any of your profits.

as your profits should never have come-up in the terms of the lease.


imo....
 

BinderGang

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Whatever you decide, the most obvious point: make sure you get it all in writing.
 

Togoodhlth

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biggedon,
part of the problem is that the owner had been contacted by a lot of "domainers" and unfortunately a couple of them didn't follow through with their promises.
One guy talked about putting together an offer in the $200k range and then made an offer in the $80k range.
He has been contacted several times and each time the potential buyer left him with a bad taste in his mouth.

So when I contacted him he was very standoffish and only after a few discussions did he loosen up a tiny bit.

Basically, the name is very valuable to me. So I am really exploring every possible way of making this work.

Yesterday I made a comment to a colleague that I was not going to lease the domain with out an option to buy after 1 year for a predetermined amount of money even though the seller does not want to do this. I think I am going to stick to my guns as I ahve a bad feeling about the lease only idea.

Thanks again for the comments. Insight from the members here is definitely helping me sort this out.

John
 

DN BROKER

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i would never lease a domain, ill just buy it...
 

Togoodhlth

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i would never lease a domain, ill just buy it...

Yeah that is what I was attempting to do but the owner decided he doesn't want to sell but only wants to lease it.
 

RustyK

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Take the keywords and be creative. If they won't sell then use your spell and create a name using the same keywords.
 

redomainer

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I have "licensed" a few of my domains to others.

The people that license domains from me are building up the "brands" for me in some respects. Yes, the domains will be more valuable (for me or their competitors) after the license agreement expires. However, to be fair to my customers, I gave the option of a long-term license agreement. I'm convinced my clients will make their small investment back many, many times over. To me, it's a win-win.

I'm in a similar situation as I want a domain for my business. The owner isn't using the domain for his business and isn't even parking it. He refuses to sell it to me even though I've offered him more money than anyone else will ever offer him. For him, it's all about controlling the name.

The only option I can think of is to offer to lease the name from him. If he agrees to license the domain to me, there are two things I must have. The first is a long-term contract and the second is a guaranteed buy-out amount even if sky-high.

Is there any company (Moniker?) out there that will handle a domain lease/license? I want a company that will take control of the domain so the licensor can't welch on the deal, guarantee it the name is registered for the lease/license period and can handle transfer of the domain if/when the buy-out option is exercised.

If you're convinced the name will benefit you, don't let the fact that you can't buy it now stop you. People lease homes with the option to buy all the time or buy homes on contract. The main difference is that the option or contract is typically recorded and on record with the county.

If anyone knows of a company that can handle the paperwork, control, registration and purchase of a lease/license, please post. Does anyone know if Moniker can handle something like this? Thanks.
 

Togoodhlth

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Take the keywords and be creative. If they won't sell then use your spell and create a name using the same keywords.

I have some similar names but this one is at the top of the food chain. It is the generic product name dot com. Like "chairs" or "weathervanes". So the type in traffic really can'tbe recreated without spending 5 figures/month in adwords etc.

I have "licensed" a few of my domains to others.

The people that license domains from me are building up the "brands" for me in some respects. Yes, the domains will be more valuable (for me or their competitors) after the license agreement expires. However, to be fair to my customers, I gave the option of a long-term license agreement. I'm convinced my clients will make their small investment back many, many times over. To me, it's a win-win.

I'm in a similar situation as I want a domain for my business. The owner isn't using the domain for his business and isn't even parking it. He refuses to sell it to me even though I've offered him more money than anyone else will ever offer him. For him, it's all about controlling the name.

The only option I can think of is to offer to lease the name from him. If he agrees to license the domain to me, there are two things I must have. The first is a long-term contract and the second is a guaranteed buy-out amount even if sky-high.

Is there any company (Moniker?) out there that will handle a domain lease/license? I want a company that will take control of the domain so the licensor can't welch on the deal, guarantee it the name is registered for the lease/license period and can handle transfer of the domain if/when the buy-out option is exercised.

If you're convinced the name will benefit you, don't let the fact that you can't buy it now stop you. People lease homes with the option to buy all the time or buy homes on contract. The main difference is that the option or contract is typically recorded and on record with the county.

If anyone knows of a company that can handle the paperwork, control, registration and purchase of a lease/license, please post. Does anyone know if Moniker can handle something like this? Thanks.

I know what you mean about being a win win situation but I look at it like leasing a building/home and then renovating the entire thing from top to bottom without having an option to purchase at any price. Also I stand the chance of being evicted at some point down the road.

I don't know of any companies who handle the leasing of domains. Not that there are not any I just haven't looked yet. I willb e searching though now that you mentioned it and I will let you know what I find.

Thanks

John
 

redomainer

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John,

I agree with you. It can only be a win-win if you have a lease deal you can live with and most importantly, an option to purchase.

Please let me know if you find out if there are any companies that handle all the details involved in a domain lease.

Bill
 

Dale Hubbard

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In a nutshell, I would never lease a domain (as the lessee) unless part of the contract involved a legal partnership, into which joint ownership of the domain was placed. The 'smaller print' or 'meat' of the contract would be based upon that.
 
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