All Forum Posts by: David Braun

Unless 1) you have a lot of money, 2) you are buying so below market it doesn't matter or 3) you negotiate a very low deposit then I would not offer from day 1. I would think they are offered only once the PSA is signed by which time you should have the DD materials to know if you want to make an offer. Any reason you can't put a badboy carveout (fraud),title or environmental carveout into the EMD agreement?

I am sure everything is able to be customized and exclusions/carveouts added. I need to discuss this with my attorney. Question is, what's acceptable... Thanks for chiming in!

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Originally posted by @Danny Randazzo:

@David Braun typically on deals greater than a few million in purchase price non refundable EMD is common. A seller will take a buyer who has non refundable EMD more seriously so it would be very difficult for you to be awarded a deal without non refundable EMD

This was a 10M purchase we were working on...

It's a practice only a few years old (I believe?)…… but a direct byproduct of supply and demand. I am sure there are deals to be had without non refundable EMD, probably harder to find. Right now there is minimal product and lots of capital chasing it.

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Originally posted by @Justin Goodin:

@David Braun Hey congrats on taking action and being one of the top offers. As you said, hard EMD is common right now in this very competitive market. All of the LOIs I submitted in 2020 had hard EMD down in my offer. A big part of it comes down to your underwriting and your confidence in the deal. If you are 110% confident your underwriting is correct and you have done all of due diligence, you will feel a lot more comfortable putting down hard EMD. Like I said, in this competitive market, that could move the seller in your direction and give them more confidence you can close the deal.

You are correct, there are certain situations where the the hard EMD can become refundable based on a couple circumstances that will be out of your control. The main thing about this-MAKE SURE IT IS IN WRITING.

Let me know if I can help or provide you with the LOI I use which has all of the necessary pre cautions already stated in writing. Thanks!

Thanks for your thoughts! Unfortunately, getting into the top two offers doesn't get me very far :-( But, hey, we'll keep trying. Maybe the next deal I will feel more comfortable. In this deal, I came in a bit late to the game so I was not yet 110% confident in my underwriting. I did like many aspects of the deal and market it was in. I was not ready to make 100k non refundable though. I need to speak to my attorney about wording to protect myself somewhat. Yes, I'd love to see how you word your LOI as it relates to this.

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Hi all! I recently lost a deal I was trying hard to get. We were one of the top two offers but we lost it when the other party offered non refundable EMD. I know this is very common, just wondering how to deal with this. I was uncomfortable putting down EMD as this would be the first deal I did on my own (as part of a syndication) and I didn't feel confident enough.

Are there exceptions in which case the "non refundable" money would nevertheless become refundable?? I.e. what's if the Phase 1 discovers a serious environmental issue? Or structural issue discovered.....? I am sure the non refundability clause can be customized but what are the norms with this? How can I feel more comfortable offering non refundable EMD? Thanks!

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Originally posted by @Catherine Emert:

We write offers that earnest money will be non-refundable after the inspection period - you are less likely to back out after the inspection is acceptable so it's a bit safer while still a little risky.

Yes, that I know. The offers I am competing against are putting up non refundable EMD from day 1. After the inspection period doesn't compete against them.

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@Nicole (Dunlap) Pendergrass Wow! Happy for you! 2021 to many more!!

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I say broaden your base, look outside your immediate area but try to stay within a 3-4 hour drive. However, this problem is a national one not a Florida problem :-(

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Wow! So heartening to see a 15 year old looking at the road ahead instead of just sitting and watching TV or doing who knows what?! You are WAY ahead already! As others here have said; you have time on your hands. Perhaps try to get side jobs working for a house flipper etc. Learn from anyone in the field. And in a few years, maybe go for a degree in real estate. Maybe. More often than not, RE investors are better off without the degree though.

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Hey all! I'm trying to learn more about the STNL (single tenant net lease) space. Can anyone direct me to some good resources? Books, websites etc.... Thanks!

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All Forum Posts by: David Braun

David Braun has started 3 posts and replied 10 times.

Post: Non Refundable EMD (in Multifamily)

Post: Non Refundable EMD (in Multifamily)

Post: Non Refundable EMD (in Multifamily)

Post: Non Refundable EMD (in Multifamily)

Post: Non Refundable EMD (in Multifamily)

Post: Non Refundable EMD (in Multifamily)

Post: My first commercial apartment building!

Post: Need to put capital to work but can't find deals!

Post: Advice for a 15 year old

Post: Advice on learning the STNL space