What is a LOI and how do I write one?

[Michelle Schultz]

My husband and I are interested in making an offer on a laundromat and the broker (who is extremely unhelpful and noncommunicative) said we could make a “bid” and we needed to write a LOI.

What exactly is that? Any templates to go by? I’d like to make sure the offer has a time limit because this woman has strung us along for months without any communication other than telling us what she expects from us as a potential buyer. She does not answer questions. Any advice appreciated.

[Tahra Wright]

Hi Michelle! Generally speaking, an LOI means “letter of intent” or “letter of interest”. It’s a non-binding letter that indicates your interest to purchase the business and the most important terms to your offer (purchase price, downpayment) as well as preliminary conditions to your offer. This is used to negotiate before the terms are put into a proper contract to purchase. I think I saw a template LOI under Pro Resources. I’m more familiar with the concept in real estate transactions and other corporate transactions, but that’s generally how they work. If you don’t have access to the pro resources tab, then try googling to see exactly the type of terms you want to put in the LOI when looking to buy a laundromat specifically. Hope that helps and good luck! And yes you can definitely put in a period of time by which she has to come back and negotiate with you or have the offer expire.

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