Syndication deals, letter of intent

8 Replies

Hey everyone, For some newbie questions for you and if you can help I would greatly appreciate it! So let’s say I find a good deal on an apartment complex and I don’t have the down payment. I seek an investors help who I know who does the down payment. Would I need a letter of intent? Letter of intent is different than escrow contract ? And what’s stopping the investor to just find the address and pursue the deal anyways without me? Any books you guys recommend on reading on dealing with deals like this? Maybe syndication related books. Thanks in advanced! Peter

Here is a book list for you:

"Buying and Selling Apartment Buildings" by Steve Burges

"Multifamily Millions" by Dave Lindahl

"It's a While New Business" by Gene Trowbridge 

"How to Create Lifetime Cashflow by Buying Multifamily Properties" by Rod Khelif.

To answer your question, LOI is your first step. It is non-binding but paves the path to the actual Purchase and Sale contract.

Until the contract is signed anyone can approach a seller and make an offer on a property.

Dude in 99% you are dealing with a wholeseller who as a bad deal. You don’t sign LOI without seeing financials period. That’s only for people that they are trying to verify as unqualified buyers.

@Peter Bui Before you can jump into syndications, dive into books. @Nick B. gave you a pretty good list. I have many more in my website's library. But this is a good start anyway.  Also, I'd recommend networking with experienced syndicators and learning about their experiences as well as asking them as to what are their interests in terms of the deals' finding. Remember not every deal is as good as it looks. Besides, you need to learn how to underwrite a deal to determine whether it makes sense in the first place. So start with education and networking, and then move to the next step - looking for deals!

Best!

@Peter Bui there is so much good advise other experts have given up here and here is my two cents “Invest in yourself” before you invest any of your money on real estate and there is so much information and expert opinions here on bp and other places online.

Originally posted by @Evens Prudhomme :

Read read read. I have done. But I believe and feel someone should still hold your hand in this process.  Am i right or wrong?

That's really a personal decision. Some people do better by getting their hand held. They might not even do anything if they don't have that safety net. Others just jump right in and learn that way, bumps and bruises be damned. If you're asking then you might be the former.