In real estate, timing can be your best friend and your worst enemy — often at the same time. This was the case with one Florida developer — let’s call him “Rich” — who had a plan to build a mixed-use high-rise with retail, office, and high-end residential space. The right parcel of land became available, but he didn’t have the liquidity at that moment to put down the $5,000,000 soft deposit himself. The seller needed a good faith deposit to know he was serious, the investors needed him to be in contract to know he was serious, so Rich, if he wanted to move forward with the deal, was seriously in need of the cash for the deposit.
Rich had heard about SoftDeposits, a new company started by Avi Benamu and Jack Hazan of New York’s Winchester Equities. SoftDeposits offered him an innovative approach to financing his deposit. After checking out his purchase agreement, they set up an LLC to fund the $5,000,000 deposit on his behalf. It wasn’t a loan, and Rich didn’t need to go through a credit check or provide collateral. He only needed to pay a legal fee of $2,500 up front, plus an option fee equal to 2.5 percent of the deposit. He remained in control of the deal while taking the 30-day due diligence period to secure financing.
If Rich walked away from the deal, he would have no loans to repay, and the LLC would be dissolved. The total fees to SoftDeposits, whether he moved forward with the deal or not, would never come to more than 1 percent of the price of the property. Rich’s total costs to go hard on the contract, at $325,000, would only be 0.29 percent of the acquisition.
If you’re interested in learning more about SoftDeposits and how it can help you with your real estate purchase, check out SoftDeposits.com. You can learn more about the details of its services, use its online calculator to estimate your costs, and contact the owners directly. Never again miss a big opportunity due to a temporary lack of liquidity.