LOI + Advice Needed


#1

Hi All,

I’m seeking to put my first park under contract and hoping for a buyer friendly LOI. The park is located in the state of IL and has a couple components I’m not completely comfortable with. Planning on 60 days diligence but want to be sure I have an out if all is not up to snuff. Does anyone have a copy of a LOI or additional advice on the first step of putting the property under contract?

Thanks,

Sean


#2

Just do a contract, skip the LOI unless there is really a specific need or particular reason.

If you want to share the components that you are not comfortable with,feel free to share as this forum is a wealth of knowledge and maybe some insight from these guys will help you out! :cowboy_hat_face:


#3

Thank you! Do you have a sample contract with favorable addendums? Is that needed?

My concerns are a chlorniation system that was added in 2017 and IEPA monthly testing totaling 8k+ per year. My concern that the need for the system and testing could be the tip of the iceberg on what could be a larger problem. This is only a 27 pads.


#4

The frank and dave contract is great. But its something that you get from the bootcamp or study course, I’m not sure which one. A lot of people use it when purchasing a park, very well written. i would not use a boilerplate agreement or something from an attorney after seeing this contract and knowing how it is tailored to parks .

@PhillipMerrill is the resident expert on private water and sewer so i would def reach out to him if you have not already.


#5

I tend to like LOIs. I took verbiage from some LOIs I found online and changed to my liking. You may want to give yourself more time for DD. To some degree you need a responsive owner to get DD done. You could tie the DD to end a given number of days after receiving owner’s info.


#6

There are usually realtor based forms you can find online, such as this one for Illinois. While these are intended to be fair to both parties, you can adjust looking at other examples to meet your needs.

I don’t use this for a property being formally listed with an agent, broker - only those not on the market. Keep in mind these LOI’s are not contracts, so they are not enforceable. They just demonstrate you’re interested. You can usually get a good handle on the expenses with the owner after signing one of these, and an NDA if they are paranoid, which would ultimately alleviate your concerns…


#7

When it comes time to prepare a contract, remember these are usually very large purchases and it may be well worth it to have a real estate attorney review or draft your contract, especially one familiar with the state where the park is located and specifically mobile home parks. Calling a mobile home park broker and asking for a lawyer referral may be helpful.


#8

This is a all great! Thank you for the quick responses and the info!