Unilateral Clause for Deposits

TRANSCRIPTION

Hey, this is Terry Hale, doing this quick video.
I was speaking with a client of mine
that was getting ready to send in a deposit.
They asked me if it was okay to push that forward,
I told them about a cause that I wanted him
to insert in the actual contract
because it was so important. And that clause will save us
from having to chase down the seller
in the event that we cancel the deal.
Deals get canceled sometimes.
When they don’t come to fruition,
we want to make sure that we’re in a position
to stay in control of our money.
So the way it works is we put down
this simple deposit that ties up the property,
then we offset that deposit which is applied
to the purchase price at closing
along with the remaining amount for our down payment.
So don’t consent, don’t confuse down payment
with the deposit, right.
Deposit just ties up the property.
So this deposit amount was five grand,
not a lot of money, just $5,000 for tying up the property.
It’s an apartment building – 54-unit. It’s in the Memphis area.
Great upside, at least seven figures in the deal 
takes a little bit of money to rehab, estimated 180,000 in expense,
not a huge purchase. But definitely a seven figure deal
So, huge ROI – return on investment. But that deposit amount,
and here’s the takeaway and the tip that I want to give you,
I had my client insert something called a unilateral clause,
meaning that we get our money back.
Regardless, it just takes our signature.
That’s the universal unilateral clause.
And it does not require the seller to give our actual,
his signature to get our deposit back.
So, if you’re going to be writing these Letters of Intent (LOI),
or if you’re going to be using my copies of LOI’s,
you’ll actually see the verbage in there for the unilateral clause,
but I wanted to tell you about it
because it’s so important to make sure
that you protect your money. Even if it’s just five grand.
You want to make sure that you get that money back
with no complication in case you decide that the deal
is not the right deal for you. But there’s plenty of projects out there
in commercial real estate that can produce
massive amounts of wealth.
And I hope you enjoyed the tip.
I look forward to engaging with you here real soon.
Please go ahead and click the link in this description on this video.
Or better yet, just go to TerryHale.com to learn more
and I look forward to engaging with you real soon.
Take care