Equity Partner Letter of Intent
I'm looking to purchase a multifamily, which would be my first investment property. I have some family members that are interested in putting in some money to help cover the down payment in exchange for equity and a preferred return.
Last week, I put in an offer on a property in near Framingham, MA but was unable to get a term sheet from the bank, because the bank knew I didn't have the funds to cover the down payment. The bank kept asking if my partners have "committed". It seems unreasonable to ask them to "commit" to every deal I offer on. As a result the offer was rejected. I don't want this to happen again.
The solution I came up with is to go to my future equity partners and have them sign a non-binding letter of intent to show their interest in investing with me on my first deal with a "not to exceed" amount. I would submit this with my loan request package to commercial lenders. I'll write the letter to myself, from them, and just ask them to sign it. I don't want to pay an attorney to write this for me, it seems unnecessary because my investors are family. I'll get the attorney & CPA involved when it becomes time for an operating agreement.
Does anyone have any boilerplate for this? Or even just advice on writing the letter? Or perhaps this is the wrong approach and you'd like to offer an alternative idea on getting the lender to take me seriously. Any advice is welcome and appreciated.