How to Write a Letter of Intent (LOI) For a Bulk REO Purchase

If you are looking to purchase a bulk REO(Real Estate Owned) from a seller, you have to provide a Letter of Intent (LOI) to the seller as a first step. An LOI should be written by the buyer and makes the first impression on the seller. A professionally written LOI should contain the following information:

  • Name of the Company the Buyer is representing
  • Address of the Corporation
  • Name of the Buyer’s Mandate
  • Dated within the last 30 days
  • Information on the geographical area where property is desired
  • Purchase price the buyer is willing to pay including fees
  • Type of property desired (residential, commercial etc)
  • Level of rehab acceptable (low, medium, heavy etc)
  • Due diligence period the buyer is willing to accept
  • Closing time after due diligence
  • How the buyer will show Proof of Funds (POF) to the seller

Sample Letter for LOI

Real Estate Corporations, Inc.

123, Main Street

San Francisco, CA 94101

(123) 456-7890

November 27, 2009

To Seller of Records,

This LOI from Real Estate Corporations, Inc. is for the purpose of obtaining a portfolio of REO properties that meet the criteria specified below:

  • Purchaser: John Smith
  • Buyer’s Mandate: Jack Jones
  • Portfolio Price: 50Million USD
  • Discounted Price: Up to 57% of BPO + 4% Fees
  • Geographical Area: Northern California Only
  • Property BPO Range: $250,000 to $1,500,000
  • Property Type: Single Family Residence (SFR)
  • Level of Rehab: Light to Medium
  • Due Diligence Period: 72 hours
  • Closing: Within 48 hours after due diligence
  • Proof of Funds: Soft POF from Attorney attached
  • Contact: Buyer’s Mandate on listed phone number

Please contact Real Estate Corporation’s Inc. upon receipt of this letter for further correspondence and completing all paperwork.

Signed and Dated by Buyer:

Signed and Dated by Buyer’s Mandate:

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