Fractional Dutch Auctions of Commercial Income-Producing Real Estate Properties - TIC Plan Ownership Syndications

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Due Diligence Documentation "Exhibit P-7"

Site Real Estate Purchase & Sale Agreement (Sponsor/Project Site Seller Agreement

The following notes are provided pertaining to this exhibit:

  1. What: the Developer/Sponsor entity must have legal control of the proposed Project Site prior to the commencement of any due diligence activities and reports beyond the provision of the Market Feasibility Report and the Pro Forma Financial Analysis Presentation.  This agreement must be in the form of one of the following:

    1. an executed and enforceable Purchase & Sale Agreement (the terms of which are acceptable to the Syndicator for the purposes of completing a syndication of fractional tenants-in-common ownership interests); or

    2. an executed and enforceable Option Agreement (the terms of which are acceptable to the Syndicator for the purposes of completing a syndication of fractional tenants-in-common ownership interests); or

    3. an executed and enforceable Letter of Intent and attending Purchase & Sale Agreement (the terms of which are acceptable to the Syndicator for the purposes of completing a syndication of fractional tenants-in-common ownership interests); or

    4. ownership in fee-simple estate by the Developer/Sponsor as evidenced by a warranty deed (or similar declaration such as a special warranty deed or general warranty deed).

  2. When: executed immediately after the Developer/Sponsor accepts the Market Feasibility Report and the Project Pro Forma Financial Analysis Presentation.

  3. Why: each syndication is actually the sale of fractional real estate ownership interests to the investing public.  To enable the actual syndication sales process to take place, there has to be marketable title available when the transaction closes.  Furthermore, the underwriting of the construction mortgage financing requires evidence of site control be provided by the Sponsor/Borrower entity.

  4. Where: the title company maintains these records as does the Developer/Sponsor.

  5. How: via electronic file that is duly executed by the Seller of the proposed Project Site and the Developer/Sponsor entity.

  6. What's important: the Developer must have legal control over the real property ownership interests before the syndication process can commence.

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