1031 Investment Objectives Questionnaire
The purpose of this questionnaire is to assist you in locating a suitable replacement or investment property. In this seller’s market, it is important to have clarity in order to move quickly and not waste time showing you property that doesn’t meet your needs or wants.
When we locate a property meeting your criteria, the first step is to present the seller with a non-binding letter of intent (“LOI”), which outlines the important terms to be included in the Purchase and Sale Agreement (“PSA”). Typically, the LOI requires a PSA to be prepared and signed within 10 calendar days from the execution of the LOI. The usual due diligence period is 30 days following the execution of the PSA.
Thank you for taking the time to complete this form. It will prove extremely helpful to the process. We look forward to serving you.
THIS FORM SHOULD TAKE ABOUT 5 MINUTES TO COMPLETE.
General Market Conditions
- Cap rates (net cash-on-cash return excluding mortgage) are higher when the lease term gets below 5-7 years.
- Franchisee tenants have a higher cap rate than corporate-run and corporate guaranteed leases.
- Cap rates are higher with companies in an expansion mode.
- There are not a lot of properties on the market and they go quickly.
- The stronger the tenant the lower the cap rate.
- Most properties are sold at the asking price.
- All-cash purchases may get a little off the asking price.
- Expect properties with a good blend of security and yield to fall within the 4.50-6.25% range.