Stupidest real estate question ever

[Andrew S.]

I'm still looking for my first deal, but my agent said that "up here, nobody uses letters of intent for multifamily or student housing." So, If property X produces income Y and "needs nothing" and you offer XXX dollars and they say "yes," how do you protect yourself if DUE DILIGENCE and INSPECTION shows the actual numbers/value/physical property differ from the description? I'm looking at a student house now that is listed at a fair price with good financials, but if I make a reasonable offer and it's accepted, what are my "outs" without a letter of intent if the existing leases are not as promised, or the furnace is indeed not operable, or roof is bad, or foundation is bad..etc? I am unable to get due diligence started without a contract. Do contracts typically give you a way out if the inspection reveals items that would seriously reduce the value? Do you have your attorney put provisions in the contract for allowances for anything that needs to be brought up to code or to better working condition? So the stupid question really is, how do you offer at a price that works if you don't know what works until you've done your due diligence but you can't do the due diligence until you've made an offer?