An Introduction To NNN Investing
Retail Categories
The Investment
Types of Sellers
The Buying Process
Market Analysis
Highest and Best Use Explained
Location and Site Analysis
Financial Feasibility
Industry Trends
Due Diligence
Financing
Low Risks of Default
IRS 1031 Exchange Rules
Sample Lease Agreement
Sample Letter of Intent
Sample Commercial Inspection Report
Sample Letter of Intent
LETTER OF INTENT TO PURCHASE COMMERCIAL PROPERTY
Date
Dear Sirs:
RE: Property Purchase
(The “Property”)
The following sets out the basic terms upon which we would be prepared to purchase the Property. The terms are not comprehensive and we expect that additional terms will be incorporated into a formal agreement (the “Agreement”) to be negotiated. The basic terms are as follows:
1. Parties
The vendor of the Property is:
The purchaser of the Property is:
2. Property
The Property is that certain property with a municipal address of ____________and legally described as:
TBD
Free and clear of all liens, charges and encumbrances at Closing, except _
3. Purchase Price
The purchase price will be the sum of CAD $ (excluding GST) or $ per square foot.
4. Deposit
$ , to be provided upon execution of the formal of Purchase and Sale Agreement, and held by the Vendor in an interest bearing trust account and will be fully refundable if the Conditions Precedent are not satisfied or waived in writing by the Purchaser. Otherwise, the Deposit and interest thereon will be applied to the Purchase Price at Closing. If the Purchaser defaults at Closing, the Deposit and interest will be retained by the Vendor as its sole remedy.
5. Further Deposit
$ , to be provided upon the waiver of the Purchaser’s Conditions and treated in the same fashion as the Initial Deposit. Once paid, and unless the Vend or defaults o n its obligations, the Further Deposit shall become non – refundable to the Vendor.
6. Access to Information
Within days of execution of this Letter of Intent, the Vendor will deliver to the Purchaser copies of all documents pertaining to the Property and within the Vendor’s control, including all reports including appraisal, environmental, engineering, structural, mechanical, traffic, soils, drainage, foundation and roof reports and all other studies, notices or information pertaining to the condition or status of the Property. All such documents (collectively, the “Materials”) will be listed and referred to in the Agreement.
7. Condition(s) Precedent
The obligation of the Purchaser to purchase the Property will be subject to satisfaction or written waiver by the Purchaser
of the following condition(s) (the “Condition(s) Precedent”) within Purchase Agreement: days after execution and delivery of the formal
8. Inspection Period & Return of Materials
The Purchaser will have days (the “Inspection Period”) from the execution of the Agreement to examine the Materials, inspect the Property and complete its other due diligence investigations. The Purchaser may cancel the Agreement at any time during the Inspection Period by written notice to the Vendor, and the Deposit and interest will be returned to the Purchaser. The Materials will be returned to the Vendor or destroyed if the Agreement is not executed within the time provided.
9. Closing
The Closing will occur not later than days following the satisfaction or written waiver by the Purchaser of the Condition(s) Precedent or on whichever is later.
10. Costs
The Purchaser and the Vendor will each bear their own expenses in connection with this Letter of Intent and the purchase and sale of the Property.
11. Permits
The Purchaser will be responsible for obtaining all permits and any other authorizations or confirmations from municipal or other approving authorities which may be required by the Purchaser or the Purchaser’s lender. The Vendor will provide all necessary consents and authorizations as reasonably requested. The Purchaser will not request any governmental inspections of the Property.
12. Confidentiality
All negotiations regarding the Property will be kept confidential by the parties and will not be disclosed to anyone other than respective advisors and internal staff of the parties and necessary third parties, such as lenders approached for financing.
13. Purchase and Sale Agreement
Upon execution of this Letter of Intent, the Purchaser will prepare a draft of the formal Agreement for the Vendor’s review.
14. Acquisition of Nominee
If title to the Property is held in trust for the Vend or by a single purpose nominee, the Purchaser will be entitled to purchase the shares of such nominee for the sum of One Dollar ($1.00), and the Vendor will convey such shares and the beneficial interest in the Property to the Purchaser at Closing, with title in the state contemplated.
15. Sales Commissions
The Vendor will be solely responsible for payment of sales commission in connection herewith.
16. Good Faith Negotiations
Each of the Purchaser and the Vendor will act honestly, diligently and in good faith in their respective endeavours to negotiate, settle and execute the Agreement within days following the execution of this Letter of Intent.
17. Conduct of Business
While the Letter of Intent or the Agreement remains in effect, the Vendor will operate the Property in the normal and usual course and will keep the Purchaser fully in formed with respect to leasing/ purchasing opportunities or ongoing negotiations and all other material circumstances, including pending or actual litigation, notices received, tenant defaults or impending defaults which may arise.
18. Not a Binding Agreement
This Letter of Intent does not create a binding contract and will not be enforceable. Only the definitive Agreement, duly executed and delivered by the Vendor and the Purchaser, will be enforceable.
19. Governing Law
The parties agree that the Agreement shall be governed by the laws of the Province of Alberta.
Yours truly,
NAME OF PURCHASER
PURCHASER SIGNATURE
Date: