Started writing LOI's

Well this week i wrote on two homes, both investor owned and in dire need of repairs. How do you guys deal with the owners when you offer to buy them?

So far they have all been 70+yrs old and the homes are either in terrible condition and empty or terrible condition with long time renters in them. How should i act with the owner and are these good properties to concider for rehabs. (usually owned free and clear by owner)

Edited: 06/26/2010 at 08:49AM

Scott M.

Real Estate Investor · Rochester Hills, Michigan

632 posts
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Icon_minipost Jul 02 '09, 11:55 AM

As I said in another of your threads I would stop with the LOI on residential properties and use a standard PA - if these are investors in single family homes they may have never heard of a LOI.

How do you act? You don't - be yourself. Acting will only get you in trouble. Sure fake it till you make it but that is pretend you know what your doing when you don't - but be yourself.

Beat up homes that are 70 years old may or may not be good - way to little info to know. Nice neighborhood? Is it a place where people live and rent? Really depends on the home / area.

Investors can be a tough crowd - most think what they know is fact and your not going to convince them otherwise. If they think the home is worth 100K you can show them stats till YOUR blue in the face - they won't budge.

But try it - after you do it 2-3 times you will start to find what works.

Edited: 06/26/2010 at 08:49AM

Abraham Walker

Residential Real Estate Agent · New Orleans, Louisiana

8 posts
74 Influence
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Icon_minipost Jul 13 '09, 03:49 PM

What is LOI and PA short for?

I'm new to the site.

Edited: 06/26/2010 at 08:57AM

Corey Demuth

Real Estate Investor · Queens, New York

356 posts
1450 Influence
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Icon_minipost Jul 14 '09, 12:06 AM

PA is Purchase Agreement if I recall correctly. I'm not familiar with LOI, which probably explains why the 70+ year old owners of these properties don't know what it is either!

Edited: 06/26/2010 at 08:57AM

Robert Jenkins

Commercial Real Estate Agent · Encino - Los Angeles, California

123 posts
683 Influence
3 Awards

Icon_minipost Jul 14 '09, 12:54 AM

LOI = Letter of Intent.

Shorter then PA to write up. Just a quick letter saying you want to buy and some basics.

Not legally binding, so it's a good way to get the negotiations out of the way before going onto a legal contract.

Edited: 06/26/2010 at 08:57AM

Abraham Walker

Residential Real Estate Agent · New Orleans, Louisiana

8 posts
74 Influence
1 Award

Icon_minipost Jul 14 '09, 03:11 AM

Thanks for the quick response. These forums are amazing!

Do anyone have a sample/template letter of intent (LOI)?

Edited: 06/26/2010 at 08:57AM

J Scott

Real Estate Investor · Atlanta, Georgia

6086 posts
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Icon_minipost Jul 14 '09, 05:48 AM

They can be pretty much anything you want them to be. For example, here is an free-to-share LOI I found doing a quick Google search:

http://www.docstoc.com/docs/194122/Free-Real-Estate-Forms---Letter-of-Intent

Edited: 06/26/2010 at 08:58AM

Temi Akojie

Residential Real Estate Agent · Largo, Maryland

12 posts
88 Influence

Icon_minipost Jul 14 '09, 06:13 AM

Yeah LOI's are known in the commercial field and are pretty much a waist of time in the residential. Commercial is longer and more complex thats why you do a simple Letter of intent to just say you're interested and if they accept it you do a full offer. Residential doesn't require nearly as much paper work so LOI is spit on by most real estate agents (not all) who do residential- I've heard agents say they just throw them away. They don't understand that investors make so many offers we don't have time to do a several page offers per property but they don't care.
Stick to a PA most people will take that more seriously.

Edited: 06/26/2010 at 08:58AM

Robert Jenkins

Commercial Real Estate Agent · Encino - Los Angeles, California

123 posts
683 Influence
3 Awards

Icon_minipost Jul 14 '09, 06:24 AM

Well I come from commercial and i've done Residential. I use both i'm just more comfortable with LOI. So if they spit on them i could careless, my money is as green as someone who uses a PA.

Edited: 06/26/2010 at 08:58AM

Dory Peters

Real Estate Investor · dc, Washington D.C.

393 posts
1985 Influence
3 Awards

Icon_minipost Jul 20 '09, 12:18 PM

I also use LOIs for both commercial and residential, and I haven't had any problems. However, a commercial agent did grumble about one once, because I wrote mine as a multi-part offer (which allowed the seller select the set of terms that made the most sense to him/her).

Edited: 06/26/2010 at 09:03AM