Discover why successful commercial real estate investors use a letter of intent when first making an offer on commercial real estate and how you can too! In this quick training, you're going to learn what an LOI (letter of intent) is, the 3 main purpose of an LOI, the 3 biggest advantages of an LOI and best of all, at the end, you can download your very own copy of the Letter of Intent Peter Harris uses on his own deals! Here's the video training on how to use a letter of intent to make offers on commercial real estate.
Letter of Intent Form
Here is a summary of what you have learned in the video above:
Using a Letter of Intent for Making Offers on Commercial Real Estate
Two Main Ways to Make Offers on a Property (1:04)
- First Way is a typical sales contract a purchase and sale agreement
- Second way is a letter of intent an (LOI)
Definition of a Letter of Intent (LOI) (1:28)
A one or two page document where you make offers on commercial properties without all of the pages of legal terms and clauses associated with a 10-20 page sales contract
The Three Main Purposes of the Letter of Intent and How to Use it Effectively (1:56)
- The letter of intent is to be a bridge between your intent to buy the property and a legal sales contract
- The LOI is a way of making an offer in a very simple way to get the basic terms out on the table for the seller
- The LOI is used to get the seller to come into agreement with you of the basic terms so that later you can negotiate all the other terms in the sales contract
The LOI is Not: (3:00)
- Not legally binding
- No legal force to the offer
- Not to be used to negotiate the terms of a sales contract
Three Advantages of Using LOIs (3:40)
1) You can make a lot of offers because it is only 1 to 2 pages long
2) LOIS are free
3) There should be no fear in making lots of offers because it is not legal binding
- I challenge you to make one LOI offer a week
- Lastly there is a link on this page directly above this summary where you can download your own letter of intent
Hi Peter, I am 53 years old and just got my life situation in a great place to seek out my life dream to be a real estate investor, preferably Commercial Real Estate. I know this is a long shot but I know along the way you must have had someone take you under their wing and help you become the successful person you are along with your hard work. I am asking you could you be that person for me. I do not want to blow this chance, I need to create wealth for my family to pass on and to help my daughter that has Lupas and needs a kidney. I want her to not have to worry about anything else. I am an African American Gentleman that has worked for 30 years for the same Company and in upper management but these positions have not created the salary I am searching for and deserve and as a black man I have moved up all they will move me in my words. I am a hard work and believe in helping others be successful. Please can you pick me as one of the ones you pass your knowledge too and help guide me to success. I appreciate and admire you. Godbless
Lee
Hi Peter, I am trying to raise capital to purchase a $10M 120 apartment building. 6% Cap Rate B Property plus 8.5 acres included. I need to find investors to cover the 25%. I am looking for a lender to fund it as well. I am new to this all as far as getting started. I have no capital at all.
Watch this video: 6 Ways to Raise Down Payment Money for Commercial Real Estate
I am a realtor selling a $17M 76 acre property that has not been used for commercial. The buyers will be converting it to commercial. They want to submit a LOI this week- but I didn’t think that is necessary. I haven’t dealt with commercial before. Is it common practice to do a LOI for a property like this?
Hi peter I would like to purchase a commercial property with no money down, can I do it
Check out this video: How to Make $10,000 in Commercial Real Estate without Down Payments, Loans or a License
I have an opportunity to purchase a distress Commercial property but it is not an apartment
building. It is a function hall and hair salon.
If someone put in a LOI does that mean I can still put in offer or does it tie everything up for 14 day
You can still put in an offer.
thanks for your messages: truly appreciate.
Nicely presented…thank you very much for this information
Peter, all I can say is, Thanks! You are a savier.
Using a letter of intent seems like it’s a great idea! I especially like that it’s not legally binding. I’m looking to start learning how to buy properties and this article was helpful. Sending a letter of intent to multiple owners seems like the most efficient way to find a new property to buy.
Excellent information and easily actionable!
Thank you for this information. I think your videos are the best.
Thanks for tremounds video and training in this version . Staring doing commercial. . Starting doing business. Is amazing. Bests Regards with a next training. Sincerely Delma Robalino.
Hi Peter,
Want to consult and be part of this deal? It’s a split property with existing Fleamarket on one side 2.85ac with new self storage 65,000 on 3.35 AC on the other at red light, very growing area in Sarasota, fl. No debt CG zoned 32,000 car per day, bill board, cell tower leases. Will have permits for new self storage buildings 60 to 90 days and very experienced operator from U-haul on board. Single level drive up class A in completion with new tri-level only we will have advantage of phasing with 3 plus buildings and great signage. Value of existing is about $15 sq ft and can sell off out parcels and keep SF. Give me a call if have interest 941-376-0969
Does any of the contingencies need to be provided with the LOI .e.g financing, inspection, appraisal, Tenant removal.
I totally understand LOI it is not a binding contract, but is’nt it the time where negotiations take place over price offered?
I’m really enjoying watching your video great information for a new investor thank you.
Is there another way to download the form….
In calculating the break even occupancy rate, what if there is a balloon payment, or some type of municipality penalty; behind on taxes and/or mortgage. How do you work that into the calculations?
Wow! Is all I can say! I’m an Entrepreneur R/E investor Peter you are the Man! I have listed to a lot of webinars/ videos and Peter you are the first that make sense you are so efficient!
You explain speak and teach so well so gracefully humble I can understand every word you say you break everything down in detail! I thank you for it! There were some pieces of the puzzle missing that had my mind unsure about this thing call Real Estate so many would say all you got to do is say this and that but they don’t or didn’t break it down like you did they want you to pay thousands of dollars to get in their program just to say what you have given to people like me God Bless You! You will continue to be bless a hundred fold for this information of Gold!
You have filled many pieces of my puzzle just in one video! wow! again I say Wow!
Thank You for this LOI it will be so helpful in my R/E career!
Hi Peter
How can I start with No Money on commercial. What can do now to generate som money, I have been unemployed for so long I need money now. Any Suggestions
Emeka
Dallas Texas
These videos provide excellent information for new investors. Easy to understand. Looking forward to joining the partner program!
This is excellent content. I am new to the commercial realm but I am learning all I can from your fantastic educational postings and videos.
Where can I learn to wholesale flip commercial property.