Cash Flow Friday Tip #35: The 2 Critically Important Clauses that Need to Be In All of Your Commercial Purchase Contracts.

Real Estate Investing for Cash Flow with Kevin Bupp

Kevin Bupp

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4.9 • 675 Ratings

🗓️ 16 October 2015

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week I'm going to share with you two critically important clauses that you should be using in all of your purchase agreements. It’s very common that if you’re using a standard commercial contract from a broker that neither one of these clauses will be included and they absolutely should be. Below are the actual clauses so that you can easily cut/paste them and add them to your next contract.

Clause #1:

The PURCHASER'S Due Diligence time frame will be for a period of 60 days and will commence when PURCHASER receives all requested Due Diligence from seller as outlined on the Due Diligence request form. After all documents and materials have been delivered to PURCHASER, PURCHASER may cancel this Agreement for any reason, at the sole discretion of PURCHASER, within sixty (60) days after receiving all documents and materials from SELLER. In the event that PURCHASER elects to cancel this Agreement during the initial 60 day inspection period this paragraph shall serve as authority to the Escrow Agent from the SELLER to act upon the “single order” of PURCHASER to distribute the Earnest money to PURCHASER. Additionally, this paragraph shall serve as the SELLER’S release of the Escrow Agent from liability for disbursing the Earnest money to PURCHASER,

Clause #2:

PURCHASER to have a period of 30 days following above Due Diligence period to secure financing at terms acceptable to PURCHASER. PURCHASER may cancel this Agreement during this Thirty (30) day period in the event that PURCHASER does not obtain a loan approval for the purchase of the Real Estate and Personal Property that is satisfactory to PURCHASER. An automatic extension of 30 days shall be granted to PURCHASER for loan approval and funding provided LENDER provides a letter showing the loan approval and funding process is moving forward and additional time is needed to finalize the loan and funding process.

Recommended Resources

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Transcript

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0:00.0	Welcome to Kevin's Cashflow Friday Real Estate Tip, where Kevin shares with you strategies and tips that will help increase your cash flow,
0:12.8	make you a more sophisticated investor, and provide you with the tools necessary to take your real estate business to the next level.
0:19.5	Now, here's the man you've been waiting for,
0:22.3	Kevin Bub. Hey guys, Kevin Bup here with episode number 35 of the real estate investing for cash flow,
0:28.7	cash flow Friday tip. Thank you for joining me today as I share tips and strategies that will
0:33.6	hopefully bring you a ton of value and help take your real estate business to the next level.
0:38.7	This week, I'm going to share with you two critically important clauses that you should be using in each and every one of your purchase agreements.
0:47.2	It's very common that if you're using a standard commercial contract from a real estate agent or broker,
0:53.5	that neither one of these clauses that I'm
0:55.2	about to share with you will be specified and they absolutely should be. Okay. So you just need to
1:00.6	make sure that they're in whatever purchase agreement you're using. Okay. You can easily add them as an
1:05.7	addendum to the original contract if needed if they're not already included in there, which they're
1:09.5	probably not. So you can just add them in there or just add a separate addendum to the original contract okay now the very first
1:16.5	clause i'm just going to read these to you exactly how they should read and i will include each one of
1:21.2	these clauses in the show notes so that you can easily go to my page and you can copy these out of
1:26.4	my show notes from my website or on iTunes.
1:29.3	You can just literally copy them and put them into your contract or copy them to a word doc for a future use, okay?
1:35.3	Now the very first clause reads as such.
1:38.3	The purchaser's due diligence timeframe will be for a period of 60 days.
1:42.3	Now, just so you know, that's 60 days is just for this example.
1:46.4	We use 60 days a lot.
1:47.8	Sometimes we'll do it shorter than that.
	...

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