Quick Start – Part 10

Now that you’ve negotiated a” what if statement” you want to pull out a letter of intent.

This basically talks about some very simple terms, for either owner financing, sub 2 or lease option assignments or sandwiches.

The letter of intent should basically say the following, for a lease option assignment.

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(NOTE – THIS IS NOT A LEGAL DOCUMENT – TAKE TO YOUR ATTORNEY)

Letter Of Intent to Lease with Option

Subject property is at this address: ___________________________________________________________

Owners of Record are: _____________________________________________________________________

Legal Description is: _______________________________________________________________________

Purchaser: (name of your LLC) _______________________________________________________________

The above Owners of Record wish to enter into a Lease with an Option with the Purchasers.

It is understood that the Owners of Record and the Purchasers understand the following:

1. The Purchasers are licensed in the state of ____ to act as a real estate agent, but in this transaction is acting as a principal buyer and not “agent for”.
Please be advised that purchaser is a real estate investor that intends to enter into the agreements contemplated for the purpose of investing in real estate as a going business concern and to make a profit.

2. The Owners of Record and the Purchasers agree to enter into a Lease and an Option To Purchase. This lease and option will have the following Terms and Conditions in items 3 – 12.

3. The Rental Term for property’s Rental Agreement shall be for 12 months with possible qty. (2) 12 month extensions.
The rental amount per month paid in arrears is $________________ per month, starting on __________ (date).
These terms may be changed with both Owners of Record and Purchasers written consent.

4. The sales price shall be EITHER based on
a) the AVERAGE comparable values that have sold in the last 3 months with attached Comparable Marketing Analysis or
b) $____________________.
These terms may be changed with both Owners of Record and Purchasers written consent.

5. It is understood that the sales price cannot be higher than appraisal, as to assist the purchaser qualifying for a new mortgage.
If the appraisal is less than the sales price, at the time of exercising their option, the owners of record and the purchaser both agree that the sales price will be based on the new appraisal.

6. The option fee will be $_______________, and at the time the option is exercised, the option fee will be applied toward the purchase price.

7. This letter of intent will act as escrow instructions for both the owners of record and the purchaser.

8. It understood that this letter of intent is a “meeting of the minds” of general terms, and conditions, of the lease an option that will be signed with notary witness.

9. It also understood that this letter of intent is not binding, but serves to communicate intention of the purchaser and owners of record.

10. Time limit: either party, the purchaser or the owners of record, can cancel this letter of intent by simply not entering into a lease option by this date and time:
Date:______________ Time:________________
After this date and time, this letter of intent is void.

11. Purchasers are allowed to assign their Lease and Option to a third-party without the consent of Owners of Record.
Owners of Record realize and understand that the Purchasers will assign for a fee and to create a profit for Purchasers.
Owners of Record realize that there is no fee paid from Owners of Record to Purchasers for entering into this letter of intent.

12. Existing In-Force Listing Agreement
___ There is ___ There is not
an existing in-effect listing agreement with a real estate agent.
It is understood that if there is an existing in-effect listing agreement with an agent, that agreement may be in effect and a commission may need to be paid when the property is sold.

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Signatures

Owner 1 x _________________________________ Printed Name _____________________________ Date ________________

Owner 2 x _________________________________ Printed Name _____________________________ Date ________________

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Purchaser 1 x _________________________________ Printed Name _____________________________ Date ________________

Member LLC Name _______________________________

Purchaser 2 x _________________________________ Printed Name _____________________________ Date ________________

Member LLC Name _______________________________