Bulk Sale Transaction in Real Estate

July 23, 2009

How to Successfully Negotiate a Bulk Sale Transaction

 

What is a Bulk Sale, how do they work and how do I know if a Bulk Sale Transaction is right for investment portfolio?  First, a Bulk Sale of Real Estate property is offered to potential investors by a lien holder of foreclosed properties at an attractive price to remove them from their inventory and provide cash infusion into their institution. There are many individuals and companies who feel they can accommodate this type of transaction, but often fall short of being able to accommodate the Buyer’s expectations. Secondly, this is where we are different from other companies, and here are the reasons why. The upcoming guidelines listed below will provide your investor with control of the transaction each step of the way and provide a level of confidence not available through other service providers within this control environment.  Thirdly, there is NO REQUEST for FINANCIAL CONTRIBUTRION until after the Buyer(s) have performed their due diligence and selected their property’s.

 

 Here is how the program works,

 

  1. Potential Buyer(s) complete an Investor Profile Form for each member of the Investment Group. This is an information gathering process to determine if we can accommodate their desired property search criteria. Which includes but not limited to State, County, City and Zip Code locations as well as property condition and average price per property? Also, the amount they are looking to invest ($5mm minimum) and the frequency of future investments.
  2. After review of the Investor Profile Form, information gathered from this form will be used to complete further Documentation. First, a Non Circumvention Non Disclosure Agreement is prepared and sent to the Investor for there review and signature(s).
  3. Upon receipt of the executed Non Circumvention Non Disclosure Agreement, a Letter of Intent is then prepared using the information gathered from the Investor Profile Form, as well as a Sub Fee Agreement and Master Fee Agreement and Mutual Non-Circumvention-Disclosure Agreement. This is to protect all parties involved from misappropriating information and to respect each party’s relationships.
  4. Now each party is protected, the Letter of Intent is forwarded to the Lien Holder’s Representative. In the first transaction, this Representative has a conference call which the potential Buyer(s) to explain the transaction in its entirety with the Buyer(s) and to answer any and all questions the Buyer(s) may have so there is a complete understanding of the process.
  5. Normally, within 2 business from this conversation, a tape is provided DIRECTLY TO THE BUYER(S) to review, perform their due diligence, and determine which properties they want from the Tape provided. Also, any alternative properties in the event any of the selected properties were sold during the due diligence period.
  6. At this point, the Buyer(s) have selected their Properties and Signs Purchase Contract, a 10% Good Faith Deposit is submitted to Open Escrow.
  7. Buyer(s) have between 7-10 business days to submit the remaining funds into Escrow to Close the Transaction
  8. Escrow and Title work together to transfer the Title from the Lien Holder to the Buyer(s) LLC’s name and the transaction closes.

 

This is as simple and straight forward as possible we can make the transaction. We are looking forward to accommodate you and your buyer(s) in the near future. As always, should you have any further questions, please do not hesitate to contact me at your earliest convenience.

Randall Traw

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