Why LOIs Are the Real First Impression
When most people think about multifamily investing, they think about underwriting, tours, and closing day photos.
But ask any seasoned broker or seller, and they’ll tell you: the deal is often won or lost at the LOI stage.
In today’s 2025 market where sellers are cautious, buyers are selective, and lenders are tight, the Letter of Intent (LOI) is your chance to position yourself as the buyer of choice.
A sloppy LOI? You’ll be ignored.
An overcomplicated LOI? You’ll be seen as difficult.
A creative, clear, and fair LOI? That’s how you beat competitors, even if your offer isn’t the highest.
What’s Changed About LOIs in 2025
In 2021–2022, sellers only cared about price. If you bid the highest, you won.
But in 2025, sellers care about:
- Certainty of closing (no one wants retrades).
- Speed and simplicity.
- The buyer’s reputation and track record.
- Creative structures that solve their pain points (taxes, debt payoff, timing).
According to JLL’s 2025 Multifamily Investment Outlook:
- 34% of deals in 2024 fell through after PSA (Purchase Sale Agreement) due to financing issues.
- Sellers are now heavily screening LOIs for seriousness and execution ability.
Translation: The best LOI isn’t always the highest number—it’s the strongest story.
The Anatomy of a Strong LOI
A winning LOI is short (2–3 pages), clear, and covers:
- Property details.
- Purchase price and terms.
- Earnest money deposit (EMD).
- Due diligence period.
- Closing timeline.
- Financing structure.
- Special terms (assumable debt, seller carry, etc.).
But what makes it stand out are the intangibles, the way you write it, the confidence you convey, and the alignment you show with the seller’s goals.
Entrepreneur’s Edge: LOIs as Business Proposals
As someone running multiple businesses, I view LOIs like pitch decks.
When pitching a client, you don’t just throw out a price, you:
- Show that you understand their needs.
- Build trust through clarity and professionalism.
- Offer a solution that works for both sides.
That’s exactly how an LOI works in multifamily.
Section 4: Key Terms that Win LOIs in 2025
Here are seven elements I emphasize in my LOIs:
1. Certainty of Closing
- Be upfront about financing. If you’re assuming a loan, say it. If you’re raising equity, show proof of capital relationships.
- Add a sentence: “Our team has successfully closed 4 transactions in the past 18 months with similar structures.”
2. Earnest Money with Teeth
- In competitive deals, sellers want hard money early.
- Example: $100,000 EMD with 50% going hard after 7 days of DD.
This shows confidence without being reckless.
3. Realistic Timelines
- Don’t promise 20-day closings if you can’t deliver.
- I often underwrite for 60 days but LOI for 45, giving myself flexibility.
4. Flexibility in Structure
- Offer seller financing if it helps their tax plan.
- Offer to assume debt if it lowers their prepayment penalties.
One LOI I sent in early 2025 won against a higher bid because I structured 20% seller carry at 4.5% interest.
5. Clear Due Diligence Language
- Be specific: “30 days for inspections, lease audits, and financial review.”
- Avoid vague terms that scare sellers.
6. Show You’re Easy to Work With
- Brokers remember “problem buyers.”
- Keep it clean—no unnecessary legal jargon.
7. Personalize It
I sometimes add a short paragraph about why I like the asset, location, upside, and fit to the portfolio. Sellers appreciate knowing you actually want the property, not just the yield.
Case Study: LOI That Won a Deal in 2025
96-Unit, Dallas Submarket
- Asking Price: $12.4M
- Competing LOIs: 4 (including one $400K higher than mine).
My LOI included:
- $250K EMD, $100K hard after 10 days.
- Assumption of seller’s 4.3% loan (saved them prepay).
- 45-day close, 30-day DD.
- Seller allowed to keep leasing office signage until their new project opened (non-financial term but important to them).
Result:
The broker called me and said: “You weren’t the highest, but the seller felt you were the safest.”
That deal closed in May 2025.
Personal Experience: When I Lost a Deal
I once lost a Phoenix deal because my LOI was too generic.
The broker told me: “Honestly, your offer was solid, but another buyer showed they really understood the seller’s needs.”
Lesson: Sellers and brokers are human. They want to feel like you “get it.”
Common LOI Mistakes to Avoid
- Being too aggressive (overpromising, then retrading).
- Being too vague (leaving out terms).
- Copy-pasting templates (looks lazy).
- Not highlighting execution track record.
- Focusing only on price.
How LOIs Connect to Underwriting
Strong underwriting = strong LOI.
If your underwriting is creative (stress tests, seller financing, expense challenges), your LOI can reflect that. Instead of saying: “We’ll pay $11.2M cash,” you say: “We’ll pay $11.2M with $2M seller financing at 4.5%—giving you strong tax deferral.”
That’s how you differentiate.
Action Steps for Entrepreneurs Writing LOIs
- Step 1: Build credibility with a one-page track record sheet.
- Step 2: Always align terms with the seller’s pain points.
- Step 3: Keep the LOI short (2–3 pages).
- Step 4: Confirm proof of funds or capital sources.
- Step 5: Follow up with a phone call, don’t just send a PDF.
LOIs Are How You Win the Game Before It Starts
In 2025, sellers and brokers are flooded with offers. What separates the winners isn’t always money, it’s confidence, clarity, and creativity.
Your LOI should say:
- “I can close.”
- “I understand you.”
- “This is a win-win.”
If you get that across, you’ll win more deals, even in a tight, competitive market. This September, I’ll be walking through real-world LOI templates, negotiation strategies, and roleplays at the Dallas Multifamily Mastery Course. September 12–13, 2025, at The Statler Hotel. Only 50 seats are available. No replays. No handouts. Lock in your seat now
