Sign California Banking Letter Of Intent Free

Industry sign banking california letter of intent free

hi everybody it's scott johnstone thank you again for joining me for another one of the post production videos for seven buckets of revenue the today's lesson and you're gonna have to go and print out this word document to take your notes uh because it's important that you do so so i'll have assumed by now you've done that i'll slow down okay you've done it anyway so today's particular proposal we're going to go through and the bucket of revenue we're going to discuss is you representing a buyer that's wanting to buy a building so you have an exclusive right to represent this buyer and you're putting an offer in on a piece of property that's owned by a building owner that you're going to want to buy now this example what i've done is i've i've um i've made a purchase of a of a condominium within a building it's a you're buying a little section of a building now you can modify this to say you're buying the whole building too i just made it more intricate so that you could if you're potentially your buyer was a small buyer they could also you'd have language that would allow you to uh buy a portion of the building so i just want to go a little bit deeper just so you'd have you could manipulate this to make it in you know even more robust if you wanted to so a lot of there's a lot of small buyers out there that can't buy a building that maybe is 10 000 square feet maybe 5 000 square feet so they want to buy a little they want to buy a unit that is in their needs range i know maybe 1500 to 2500 square feet that's real common in in buildings for sale that are condominiumized and that's a that's a business that's been pretty uh that flourished in this last development cycle there's a lot of a lot of that product out there currently and a great way for a tenant to build equity over time take advantages of the of the depreciation on tax if they form an llc llp they then um the company pays them rent right so that there may be some profit involved there's there's there's all kinds of great benefits to owning and uh if you buy at the right time and and for reach for for for all intents and purposes today is probably the best time in the in the next 20 years to buy because of the down cycle we're in and as i said brokers make money in any cycle it's just a matter of being in front of the business so make sure you on a daily basis are out there doing your job and you'll you'll run into deals it's just that simple and this is this is one that's very common today oh it's one of those buckets of revenue that those investment brokers typically don't get into so it's office retail or industrial usually that takes advantage of this uh so take my logo off put yours on this is to john doe and this says that that the other side is represented by a broker because usually every building that has that has a that is for sale is listed and you're representing the buyer in this particular situation and it's an offer to purchase this building in this suite in any city and you're writing it to the broker whose name is michael and it goes on to say the bridge commercial property is pleased to present this offer that outlines general terms and conditions by which imagery community property trust or assignee that's your buyer would enter in a purchase and fail agreement with blah blah blah for the above referenced building you describe your buyer you usually give them some some when you're presenting this you should also give them bank statements to let them know that you've got cash and if led enough also what you can do what you should do is get a qualification letter from the bank now if it's an sba loan they'll give you an sba qualification letter if it's a regular traditional loan the bank will issue a qualification letter you ask your banker for that you say listen i need this to present with my offer so that they know that i'm serious and i have the capacity to close on the loan and banks will issue they issue these all day long it's really simple um so that goes on to describe the property as i mentioned this is a condo so it's 2500 square feet within a bigger building and here is the uh the association condo map number right property property occupancy number purchase price is 500 000 200 per square foot every deal in commercial real estate is based on a per square foot cost it's just the way it is we always look we always equate things back to per square foot so understand what that is on every deal because that's how you quote comparables how where where were that deal down i don't know it was 250 bucks a foot you usually don't know you know the big number you'll you'll know it if you do research but the per square foot cost is what counts because that's how where we gauge our cycles and where you know when you build a building you also want to know what the building cost on a per square foot basis so you know what the basis of the building is um next the deposit fairly commensurate with the price 25 000 talks about how and where and when it will be released after due diligence operating of escrow or opening of escrow when and who the escrow company will be etc escrow close date will be you know 21 days after open due diligence a buyer shall have 14 days of due diligence it's a really fast deal but whatever this is i've seen these happen pretty pretty commonly especially if a user wants to get in fast okay due diligence here's the period of time due diligence and in that due diligence period which was on the prior page it says due diligence period within that due diligence period here's all the stuff that the seller has to provide to make sure we have all the documents for for to make sure it's in good shape and that you know there's no cloud on title and that and that we have all the records for the building because we're going to want to pass those on if we ever sell it too so these are just basic stuff a title report physical inspection environmental audit make sure the building complies with governmental regulations any documentation that goes on along with the with the space that the owner has expenses etc etc any leases prior due diligence materials themselves that are required to be delivered zoning in ccnr's it's a description comes from the city and the uh association that manages the building uh a preliminary talib report supporting documentation soils report outs of policy of title insurance the current one that's on the property architectural design guidelines that's the design guidelines for the city the building was required to build upon available hazardous materials studies if the building owner has one he's got to provide that special publication update this has to do with this has to do with uh earthquake uh zoning if this falls within a certain distance of an earthquake fault it's unique to california just let's put it down um let's see uh flood zone map for fema it's on the from the fema map i've explained this prior but you don't want to buy a building within a flood zone because you can't get flood insurance if and you want to make sure you've got a fema report that says the building's outside of it so you do get flood insurance if the building does flood that you then keep collecting your policy architectural and engineering as built plans those always come from the original architect and they are recorded with the with the uh with the county and and with the city and you usually need your own set so that you know exactly what was built and that it meets the designation of complying with city codes for ada and other construction permit requirements fire uh engineering etc all physical and environmental studies performed by the by the seller if there have been all expense bills and files so they know what the expenses of the building are and what they can expect on a monthly basis and because they're going to have to start paying those expenses themselves you want to estimate them temporary occupancy here's a unique one i put this in here if for some reason attendance in a hurry or buyers in a hurry like this one potentially is they and they need to occupy space because they need to get out of their current lease they may ask for a temporary location to do their business until escrow closes and that's what this particular paragraph is about assignment uh var has the right to assign this to a different entity prior to close i've described this before oftentimes an llc or an llp will be formed during escrow and the escrow can you know excuse me that the buyer can assign the initial party to the format formed party prior to close title insurance seller shall provide an alta policy alta is the highest level of initiative title insurance seller will provide cost and pay for the cost of that sometimes they'll split that cost depends on depends on the situation closing costs credits and prorations sellers responsible for title insurance survey fees etc etc this describes all the costs that the escrow company will have to account for at the end of the deal because the escrow company always has a reconciliation statement that everybody has to agree to at the end of the deal to then pay at parties out their probations the funds to the seller at the close the brokerage commissions and any expense hold backs that were put into the escrow as a result of the requirements of the deal cooperation of seller standard language right of entry standard language agency disclosure that says that there's a broker involved there's two actually in this particular transaction and that it calls out who they are usually there'll be some commission language or a separate commission document that'll go into escrow that says how and how each party is paid maintenance obligations that the landlord has to continue to maintain the building during escrow they can't let it fall apart now in this situation of course they're going to do that because it's a condominium and the association maintains the building material change this says that if there's any adverse material change that was not disclosed that the deal could be terminated at any time representations and warranties these are the items that the landlord must warranty that if after closed they happen to pop up the landlord has the the seller has to then um repair them or reconcile them and that they warranty that they'll do so and these are pretty sticky points sometimes people get into pretty big arguments about which reps and warranties they'll they'll give some sellers don't want to get any reps and warranties because they don't know about this these items and and they and they don't want to be responsible for things they don't want and they don't want to know that they currently don't know about uh you know you'll get more into real estate law but you know there are fair there are fair items to ask for and there are there are there are items that may be reaching and you'll find out what those are when you once you get into a deal you'll you'll you'll hear the battles between both parties you'll be sitting back going wow this is crazy but these these are the typical ones that are fair to ask for real estate broker describes the broker um finalization of purchases and sale agreements the documents have to be purchased the purchase and sale agreements have to be drafted within a certain period of time so that the deal is forwarded in in timely manner and the buyer the seller provides those documents to the seller it says also that this document is not a purchase and sale agreement and that you cannot account you can't hold each party accountable because of this letter of intent a purchasing jail agreement has to be the actual document that is the binding document which after signed is and is given to escrow that is that is the guiding document for all escrow to actions to take place hazardous materials in h and ada you're just you're disclosing any that there if there are any you have to say that there are or not confidentiality between all parties very standard commissions see in this one i say i actually call out my fee i say i want i you know i expect to be paid a three percent commission which was being offered of course but i i call it out to be real obvious about it in this particular document [Applause] next goes on to say please evidence your agreement by signing below this is funny uh 20 what is this 211 that's i don't even mean that that was 20 thousand years from a long time 100 000 years my god i don't know my brain's not working entirely but it's a long time from now let's put it that way stick in the proper date i go on to say thank you and then the buyer and the seller have to have to sign this to to come to an initial agreement for the letter of intent to then have purchase and sale agreements drafted always the buyer signs this if they're presenting the offer first and then potentially the seller will sign it if he agrees at some point a document an loi like this we'll get it we'll we'll get uh signed by both parties i then go in to throw in our standard state language that goes along with every deal almost which is our uh state lease americans with disability hazardous materials and tax disclosure document in your state you may have your own make sure you look it up and provide it as a part of the document if you're in california here you go it's free there you go i hope you i hope that was helpful to you you'll see there's a lot of repetition in some of these documents but you know i don't care i want to make sure you've got a full blown hardcore good to go today in today's marketplace the highest standard of operating um material that you can use no matter who you are right off the streets you just got your residential license or or you or the lot your basic license or you've you know you've been in the business 20 years and you're just looking for a really good library here you go so thank you very much i look forward to seeing you next segment and in the meantime have a really great day and i'll talk i'll see you soon thanks bye