Commercial real estate has turned out to be a great source of income for many people. If you have the right skills and talents, you can earn more six figures in a single transaction. There are many ways of making an income from commercial real estate, and below is one of them: the Two-Step Purchase Offer Process.
This process is, as the name suggest, comprised of two major steps which are writing the letter of intent and the purchase and sale agreement.
Letter of Intent
The letter of intent is the first of the two steps in the process. In this letter, you are going to convey your intention of buying the commercial property in question. Thus, you need to mention exactly which property you are interested in, how much you are offering, and the earnest money deposit you are willing to give. It should also include the conditions for the offer including financing, defaults and other conditions which you deem necessary.
However, the letter of intent is not considered as a binding, and instead only seeks to inform the receiver of your intentions. It is very helpful though in getting the attention of the receiver and sparking their interest in making a deal with you.
Purchase and Sale Agreement
The purchase and sale agreement is the legal and binding document in this process after it has been duly executed. In its simplest sense, a purchase and sale agreement is a legal contract between the two parties involved, you being the buyer and the other party being the seller. Once this contract has been executed, you are obligated to buy the property and the seller is obligated to sell the property. The execution of the purchase and sale agreement finalizes the deal between the two of you.
Once you have acquired the property you are now eligible to conduct repairs if necessary or simply sell it for a higher price than you purchased it. Being the new owner, it is now up to you to price your new property according to the profit margin that you want.