KERRA Investments Closed On Another Property!

By Kerra
July 24, 2017

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
the KERRA team

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