How ironclad is a letter of intent?

[David Fritch]

There is a mobile home park I've wanted to look into for several months. I stopped by and talked with the owner today. I had done business with her years ago and she is friendly. When I asked, she said that she had signed a Letter of Intent with a large company last week and they were sending someone out Monday. 

The park seems to be sub-optimally managed. She said she hasn't sold for years because she can't find the time to organize her information (rent rolls, expenses) etc. 

I have a feeling this company is going to get a pretty low price because she does not have her act together. I would not mind paying fair market value based on NOI or even a little more because I know better management will bring much higher profits and I plan to repurpose some of the land, which is frontage on a very busy commercial strip, to commercial.

I'm resisting beating myself up for not walking in months ago. I don't find much use for wallowing in regret. All I can do is learn and move forward and act faster in the future. 

She has owned it for 40 years, managed it haphazardly and probably doesn't have a clear idea of current and potential value. She also mentioned she expenses as much off her personal expenses as she can on the park and needs to weed that out. The office itself is disarray so I can only imagine the books. 

I know a few bright CPA's and bookkeepers. One in particular who is very experienced in commercial property would be able to go in, for a fee and figure this thing out and emerge with a clear and fair picture of NOI.

But what I'm wondering is if the LOI is impenetrable? Can she entertain another offer? Does the buyer have equitable rights? What if they use her disorganization as a way to take advantage of her and obtain a clearly unfair price? What is her recourse and rights in that case?

[Jay Hinrichs]

@Michael Bracken  well quite Frankly the thing I loved more than anything in my career was being a logger.

more than building homes .. lending money  buying court house steps.

think about it. your out in the woods.. NO hold over owners you just bought here home on the court house steps.. NO tenants..  ( nuff said about that).. no city  crap  ( like building new homes.)

no borrowers failing to pay.

Just you and the woods .. you harvest do a killer replant and next generation does it all over again.

I look at some of the hillsides I remember when I first came to ORegon that were clear cut. I drive by them today and they are full blown forests again.. renewable resource.