When to use a Letter of Intent (LOI)

Question

Good morning BP,

What's the use case for submitting an LOI vs having an agent submit a official contract?

Account Closed · Answer

@Seth Parmelee is right. An LOI is sent anytime you begin negotiations for a lease or contract. The LOI is where all the terms are listed out before actually drafting an agreement.

Seth Parmelee · Answer

well I would treat anything under 5 units the same as residential. anything over 5-20 is def commercial. That's basically when to use LOI and when to use an offer to purchase to go under contract. Too bad you aren't closer to NC I'd love to help ya out. Though honestly with commercial I would get hooked up with a broker that way you don't get screwed by something you don't know.

Kwame Knights · Answer

@Seth Parmelee and @Jacob Ketchum thank you for your input. A little background of my original question. I have a few single family rentals running them as AIRBNB's. However i would like to scale up a bit and expand my portfolio in multi family. I've been looking a 2-4 units to get my feet week but open small commercial units 5-20 units. I'm evaluating a few properties on loopnet and some offer market deals, some of them a few hours away from where i live. Now for my next step, i'm trying to figure out the best path to getting the property under contract so i can do my due diligence. I would kindly appreciate your advice.