Letter of Intent
I have heard about a letter of intent being sent to sellers. My question is this: Is a letter of intent better than submiting a written offer if not when is it's use advisable and where can I get a copy of a letter of intent.
Thanks in advance for any help.
OKCI,
Typically, a letter of intent is used as a quickie means to guage possibilities or produce mass offers. In other words, rather than spend time writing up a long contract (8 pages here), you fire off a LOI to see if there's any interest. If there is, then a full-blown contract is next.
Also, whether you're doing this yourself or using an agent, it's much easier and quicker to send out 20 LOI's than it is 20 written contracts.
That said, it's been my experience that a contract is taken more seriously, but I've bought properties both ways. There are numerous sources on the web for LOI's. In fact, there may be a copy on this site.
hope that helps...
I love letters of intent. The fact is that they are far less formal.
I usually try to find a sellers issues before I write a LOI.
Example: Theis last seller I found has a 4 unit and wants to move to CA.
I wrote a letter intent explaining all the benifites of how I would take one the responsibilities and the management and quick closing and on and on. Then at the end I hit them with the owner financing.
A LOI allows me to write it as the sellers benifite rather then saying this stuff upfront.
I find these LOI often lead to negotiations where I can actually go sit down with the sellers. Having good luck so far.
Alos - I do not use a form letter - I have better luck writing my story of how I can help them.