How do I draft the financing portion in LOI as a wholesaler??

[Bradley White]

I'm talking to a motivated seller of a 22 Unit apartment complex. I know that if you're making a cash offer in the LOI, you have to explain how it's going to be financed. As the wholesaler who's not going to be buying the property, does this mean that I have to already have an end buyer lined up who knows how they will be financing the deal?

[Chris Winterhalter]

@Bradley White

If I was the owner I would definitely ask for proof of funds. They may or may not ask however you need to be ready and able to provide one if the question arises. I would ask for POF no matter if your offer was cash or with a financing contingency. A 22 unit complex is somewhat small to ask for a company resume however they might want to know your background and success with multi-family real estate. You wouldn't provide a pre-approval letter however you could have something similar provided by a local bank (if they actually will give you this).

You don't need to include an explanation of financing with a cash offer or a financed offer within your LOI (but probably a POF letter). Also you might want to go straight to the P&S and bypass the LOI with a 22 unit property.

I definitely don't want to discourage you however I always laugh (quietly) when I speak to a wholesaler that "specializes" in wholesaling multi-family complexes (not 4 and under). To be able to consistently wholesale a multi-family complex you need to be a well capitalized highly successful operator that understands wholesaling. Essentially a highly successful owner/broker. Best of luck!