Purchasing first industrial property in NYC. Newbie needs some advice.
I found a vacant warehouse property in Brooklyn that I am interested in purchasing. Spoke with the owner and he would like me to make a formal, but non-binding, LOI to engage in further talks.

I want to make a strong offer. I will purchase with cash with no financing contingency but I would like to have at lease a physical inspection of structure and have a phase I completed prior to closing. I would love some help with questions below and any guidance on what elements should include.

A couple of questions:

1. What is typical for earnest money deposit for commercial deals on vacant warehouse? Is that deposit held by seller or by my attorney?
2. Seller specifically required I include timeline for closing in offer. Don't know how long it will take to complete phase I. Already called an engineering company to schedule. What should I offer and what should I expect in NYC market?

Thank you CRE community!
[{"id": "isqx6ed", "text": "There\u2019s a reason he doesn\u2019t want a broker involved, especially if you offered to pay for them. Buyer beware. Make sure you have good lawyers.", "replies": [], "depth": 1}, {"id": "isr05ex", "text": "Stop. Insist on the broker, contingencies, whatever, etc. \n\nGreat industrial properties aren\u2019t magically available in Brooklyn/Queens. There\u2019s reason(s) why everyone else with more resources and expertise has passed on this opportunity.\n\n1) the money is held in escrow, often by a title company. \n\n2) Phase I work will take as long as it needs to take. The firm you hire will give you an estimate based on the scope of work and how in-demand their services are at the moment. You may also need a Phase II depending on the Ph1 findings.", "replies": [{"id": "isr13ko", "text": "Yes I will insist on the inspection contingency.. I will hopefully have a lawyer by end of the week. Property was previously owned by someone we did business with. We would be purchasing from the \"estate\". I am dealing with an executor. Don't know why the resistance to having broker involved.", "replies": [], "depth": 2}, {"id": "istnv8i", "text": "Pretty fair to assume that if it is a NYC warehouse/industrial, you will get through phase 1 and need a phase 2.  Remediation is where this guy is likely balking.  Do your own research.  What was this property used for back in the day?   Ive seen people go right to phase 2 to save money and time depending on needs.", "replies": [], "depth": 2}], "depth": 1}, {"id": "isr1qxw", "text": "5 or 10% deposit upon signing the contract. Usually held by the seller atty. 30 days for phase 1 should be plenty of time (could say 21 days) as long as you get on it quickly. You should be able to close 2 weeks thereafter. Assuming you have a good attorney it can be straightforward. \n\nNYC is no nonsense so you basically assure the seller that you are good to close as long as the structure is fine and no environmental.", "replies": [{"id": "isr3tle", "text": "Thank you this is very helpful.   \nI think will offer to close 45 days from signed contract and get on the phase I immediately.", "replies": [{"id": "isr5mwk", "text": "Good. As a heads up, some prior uses will flag the environmental; on site dry cleaning, auto related, among others. Doesn't mean the site is contaminated just may require phase 2, but that's TBD.", "replies": [], "depth": 3}, {"id": "issbdzk", "text": "You need more. Brooklyn industrial prob has contaminants, use verbiage \u201cthe greater of 60 days or until all DD completed\u201d. You\u2019ll need a Ph II", "replies": [], "depth": 3}, {"id": "issgaoe", "text": "Offer an initial DD inspection period of forty-five days but also include a right to extend that if a Phase II is required. If they want a timeline for the Phase II extension, I would suggest a minimum of forty-five days.", "replies": [], "depth": 3}, {"id": "isvhyp6", "text": "45 days won't be enough. My typical contra ts are 45 day DD with 30 financing and a buyer option of 2 additional 15 day extensions. \n\nI just put a commercial property under contract for $8.5M and $100k EMD with the 45 day DD and 30 days to close w/ two 15 day extensions if the buyer so chooses with an additional $15k EMD for each extension. \n\nMy timeline to close is 75 days without a Phase 1 or Phase 2. You will need at least 45 days for the DD &amp; Phase 1.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "isr2ttq", "text": "How are you intending to use the property? Is that different than it was previously used? If so, are you sure that there won't be any zoning or other restrictions?  Do you know why it's vacant now?", "replies": [{"id": "isr4186", "text": "We will initially use for storage. It is zoned M1-1 and in an industrial area.", "replies": [], "depth": 2}], "depth": 1}, {"id": "isr576n", "text": "Earnest money can be any agreed upon amount.\n\nDown payment a different story. Probably 25% if getting a loan. I know you inferred you'll be paying all cash but I wasn't 100% sure.\n\nAre you going to be the occupant? If not are you going to be leasing it out and if so what's the plan?\n\nDo you have enough to buy it outright?\n\nEnvironmental inspectors are backed up right now. Can take anywhere from 2 weeks if you're lucky to more than a month.", "replies": [{"id": "isryjjd", "text": "\u201cI know you inferred you\u2019ll be paying...\u201d   \n\nDefinitional point; no, he did not.", "replies": [{"id": "isw9xga", "text": "I thought that because his OP stated \"I will purchase with cash with no financing contingency\"\n\nI read that wrong?\n\nMaybe I'm just getting old..... :)", "replies": [{"id": "iswda3c", "text": "I was busting your chops about the word, infer. \n\nThe way you used it was incorrect. Not as common as people conflating their, there, and they\u2019re, but very often when people use the word infer, it\u2019s incorrect. \n\nWhen you read clues and conclude something, you are inferring. \n\nWhen someone hints at something, without explicitly stating it, they are implying the unstated. \n\nOp implied that they would be paying all cash.  You inferred that they would be paying all cash.", "replies": [{"id": "iswdgoj", "text": ":)", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "isrhcdg", "text": "In Los Angeles, CA: Three percent [Initial] down payment is typical. 30% [Down]. Phase one hazardous substance investigation takes three weeks", "replies": [{"id": "ist1nbh", "text": "Wrong. You mean earnest money. Typical \u201cdown payment\u201d is much more than three percent and entirely inapplicable as he said he\u2019s not receiving financing.", "replies": [{"id": "ist7i1z", "text": "Initial deposit", "replies": [], "depth": 3}, {"id": "istio2p", "text": "Earnest money becomes part of the downpayment.", "replies": [{"id": "istmazr", "text": "The question was \u201cwhat is typical for earnest money deposit.\u201d The earnest money is applicable to the purchase price. The post I commented on has since gone back and changed his post without indicating it\u2019s edited. He simply stated that \u201cdown payment\u201d is typically 3% which is false and doesn\u2019t answer any questions OP had. So, not sure why you\u2019re throwing in your two cents.", "replies": [{"id": "isuifnj", "text": "Because you're being pedantic.", "replies": [{"id": "isv028i", "text": "It was a wildly inaccurate statement my man. You may like to post misleading information in this sub but I don\u2019t. Earnest money and down payment are two entirely unrelated items. One is generally 1-5% the other is generally 25-35%. Big difference when you\u2019re talking millions of dollars.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "isrhi53", "text": "Just go ahead and order a phase II, save yourself the time\u2026", "replies": [], "depth": 1}, {"id": "isrqlvf", "text": "To be as nice and as straight forward as possible, my advice would be to stop what you\u2019re doing. The questions you are asking are 1st grade level and it reflects your lack of experience and sophistication. Owning Commericial Real Estate is not for the green investor. \n\nIm not saying all this to knock you down, I\u2019m saying this to protect. I don\u2019t recommend \u201cfake it till you make it\u201d commerical investing. You can maybe get away with that strategy with a residential investment. I suggest you find a seasoned mentor or partner before proceed any further.", "replies": [{"id": "issds2m", "text": "Welcome to Reddit!", "replies": [], "depth": 2}], "depth": 1}, {"id": "iss2dx0", "text": "Not sure if this is against any subreddit rules but DM me if interested in getting an appraisal of the property", "replies": [], "depth": 1}, {"id": "isvavnq", "text": " Hey - I\u2019m a broker in New York City - happy to provide a valuation analysis (at no cost to you). DM me if interested.", "replies": [], "depth": 1}]