We are excited to announce on another property we have closed yesterday.
This acquisition taught us few things that we would love to share with you all.
Here are a few facts on this acquisition:
- We have started to consider this property back in late Aug 2016
- Our LOI went back and forth between Nov 2016 until Dec 2016
- We had a signed contract on Dec 2016 with a closing date of mid Jan 2017
- During the appraisal that was done by the bank in Jan 2017 we have found out that there was no easement recorded and technically, we don’t have a legal access to the property parking lot
- In Jan 2017, the seller’s attorney started to draft the easement agreement with the neighboring properties (it was estimated to take 30-45 days to complete)
- Mid Feb 2017 – first easement draft was sent for our review – we sent our comments
- Early Apr 2017 – the easement is sent to the neighbors for review
- Late Apr 2017 – neighbor’s attorney sent his easement proposal. We have send our comments
- Late Apr 2017 – we have suggested to pay a one-time amount for all future easement costs
- Mid May 2017 – the seller is threatening not to extend the contract anymore and provided us 2 weeks to agree on the easement with the neighbors
- Mid May 2017 – our proposal for one-time payment was rejected
- Early Jun 2017 – we have agreed on the easement agreement after negotiating with the neighbors’ attorney
- Early Jun 2017 – we got a notification from the seller that they have 3 tenants that are not paying and they have started eviction process with one of the tenants
- Early Jun 2017 – our lender notifies us that if we will not close in 15 days his commitment letter will expire
- Jun 20 2017 – we got confirmation that the agreed easement was recorded and we are ready for closing
- We have started to establish the holding entity and obtain the EIN for it (it is a must for the mortgage). We didn’t setup the entity until this point as we were not sure if this deal with go through…
- Jun 27 2017 – closing was set for Jul 10 2017
- Jul 7 2017 – EIN was received from the IRS
- Jul 7 2017 – closing was rescheduled for Jul 13 2017 (EIN was just received)
- Jul 13 2017 – insurance confirmation was received
- Jul 13 2017 – CLOSING!!!
So, what have we learned?
- Never ever give up. There is always a solution for any challenge you face in your way
- It takes time – Be patient. This deal took 11 months to close. But it is worth it!!
- When negotiating – draw your red lines and don’t give up on them
- Don’t get upset when you are not getting what you wanted. Find a way around it
- You can’t get it all. But you can negotiate to get the critical items for you and giving up on some less important ones