Today we’re going to talk about commercial investment real estate and the letter of intent. Thank you so much for tuning in to the Real Estate Today podcast.
I’m Bob Nelson, real estate investment broker with Pacwest Little State Investments.
Marsha Edwards: And I’m Marsha Edwards, residential broker with Windermere Real Estate. We’ve been talking about the commercial arena at commercial investment real estate and that is Bob’s wheelhouse. It’s great fun to pick his brain because he’s done it, I don’t know, a million times or so. In regards to that Bob, we were talking about when you’ve worked with a client you understand their needs and wants. You see something that matches what you think is a good match for what they want to do next with their real estate investing. You go toward that property. You suggested that the first step is a letter of intent?
Bob Nelson: It depends on the situation. I don’t really like a letter of intent because unfortunately, it’s a nonbinding situation where … Well what I do is a buyer’s broker. I would introduce this document, this small page that’s fairly detailed, “I’m prepared to offer this on these terms and close on this basis. Is this an acceptable situation to you?” And I will use this, for instance if I’m crossing state lines, because I have to then be using a form of an offer that’s specific to that particular state. So, what we do is we have a letter of intent that has all of the details and from that point forward, the seller will engage their attorney to generate the offer on that state’s earnest money agreement. It has to be totally consistent with what we had outlined in the LOI. Letter of intent.
Marsha Edwards: But Bob, how can a buyer be prepared to write an offer if they don’t understand the condition of the property? Aren’t they saying, “Well, Bob first I got to understand what’s going on there. Let’s take a look at all the units. Let’s get an inspector in there and then I’ll do my letter of intent.”
Bob Nelson: Unfortunately, it doesn’t work that way. It’s such an active market right now, if we hesitate, someone else is going to move in, be in first place. I get to be first place in the loser category. I’m at second place. That’s first loser. I have to move with extreme speed, but with extreme accuracy. Now with huge experience behind what I do, I feel fairly comfortable in doing that. If this is my first offer or my first transaction or my tenth one, holy mackerel what a train wreck that could be. But unfortunately, I need to corner it before I’m allowed to disturb tenant occupied spaces as an example, seek confidential information which would be historic performance documents and so forth.
Marsha Edwards: I’m Marsha Edwards, Windermere Real Estate.
Bob Nelson: And I’m Bob Nelson, real estate investment broker with Pacwest Real Estate Investments.
Join Bob Nelson and Marcia Edwards Eugene, Oregon, real estate experts daily at 5:30 on KPNW for the “Real Estate Today ” radio show.
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