All Forum Posts by: E. C. "Stony" Stonebraker

Cole, without seeing the contract, it's tough to say unless someone has direct experience with this, and even then, their contract likely would be different than yours.  Even if someone has experience and an idea, I think your best bet is to ask a business attorney to review the contract.

IMO, absolutely.  Anything in writing is extremely helpful, even if not part of an official document.  It proves you relied on the seller's statements.

Dan, your first thought, consulting an attorney, is the right approach.  An attorney will tell you the best course of action. It's always best to have professionals as part of your team for advice and guidance, especially early in your investing career.

If you didn't have your LOI with terms in writing, it may be tough to get the EMD back. Of course, you can sue, but that will cost attorney's fees, etc.

We always submit LOIs in writing with all contingencies and you should take the opportunity to do the same.  Hopefully someone else who has been in this situation has better suggestions than I do.

Good luck, Dan!

@Ethan Wagner, good catch!  I should have mentioned that website.  It is a good resource.

@Sindy Zheng, Two authors you should check out are Frank Gallinelli and Rob Beardsley, both have books on Amazon. You might also want to watch one of the video courses at Udemy, specifically by Symon He. 

@Erica Hutchinson, great question!  I have no idea what the answer is as I've never explored the issue.  But keep asking good questions, probe for a better way to acquire a property, and always ask "How can I..." so you get people to think creatively for you.  There are a myriad of ways to structure acquisitions, only limited by your creativity.  Good luck!

@Everett Marshall, I don’t invest in residential, but the existing lender has first rights and you’ll have to discuss the specifics with them and with an attorney to structure the deal. 

@Benjamin Cohen.  How much of the $6M raise are you expected to raise?  Normally, when starting out, it turns out to be a bigger challenge than people think.  You have to build a reputation for experience, knowledge and trust which takes some time.  

I'd recommend you read Hunter Thompson's book "Raising Capital for Real Estate."  It has a lot of very good advice from a successful capital raiser.  Good luck!

@Don Konipol, yes, you are technically correct. Virtually all ownerships of larger multifamily properties are through entities, or should be. I was getting at REIT ownership is in dividend paying shares of stock ownership in companies that normally own a portfolio of properties whereas in (non-fund) syndications you usually own an interest in an entity which directly owns one property and your interest is reflected in a K-1 which is part of your tax return. Thanks for the clarification.

@John Huynh, we invest in larger multifamilies and for those, we always inspect every unit.  If you can't see them all, have contingencies in your offer.  If a seller doesn't want to allow you to inspect or have the contingencies, I recommend you find another deal.  It's up to you and your tolerance for risk.