Master Lease Option

master lease option method

Tuesday, June 22, 2010

HOW DOES MASTER LEASE OPTIONS WORK?



For those interested in apartment real estate investing or those that want to get into any multi-family and rental real estate investing, Master Lease Option techniques can be the best way to enjoy the benefits of buying apartment buildings without the use of an apartment REIT. Because real estate investor financing may not be an option for beginning real estate investors and those that are interested in apartment real estate investing might be required to have large down payments by real estate investment lenders, Master Lease Option agreements can be a win-win situation for the potential buyer and seller. The seller retains ownership benefits, while the new real estate investor can enjoy monthly income from the arrangements that are made under a master lease agreement.

Master Lease Option methods offer a different way for those that are interested in apartment real estate investing to generate monthly income, while allowing a seller to retain the tax benefits that can come with rental real estate investing. This mutual joint venture type of relationship might be similar to an apartment REIT, but there are benefits that are easy to enjoy for both parties of the Master Lease Option. The beginning real estate investor leases a unit or units and sub-leases them for a higher rent and pockets the difference. The higher rent sub-leases have a market in the real estate investing market because they can be sold or syndicated to other real estate investors for a premium and it generates a fee or percentage for the person that might be wholesaling the lease contracts.

Through the Master Lease Option, the apartment building owner can wholesale the original lease agreements or the new real estate investor that is test-driving the building can syndicate the sub-leases and move on to the next endeavor. Depending on how the master lease agreement is drawn up, it is a mutually beneficial arrangement and many real estate investors are quite astute at generating a lot of monthly income with these Master Lease Option arrangements. The key is to learn how they work, have the sample master lease agreements or the lease contract templates and understand the best practices.

Under a Master Lease Option, it is possible to invest in any multiple unit facility, including mobile home parks and self-storage facilities, but it is most popular with apartment real estate investing because it is easier to facilitate the transactions because of demand. For this reason, it might be pointed out by some of the savvy rental real estate investing experts that a Master Lease Option works best on about any apartment or multi-family rental situations, except for the rehab or fixer-upper apartment buildings or those that are in the luxury class, which can have bigger exposures and be harder to rent.

No matter what, once you learn the Master Lease Option techniques that the experts use, it is possible for the average investor to enjoy monthly rental income without an apartment REIT or a large mortgage and down payment, which is what makes a Master Lease Option arrangement so popular for those that have learned how it works.

                                      
       How Much Is This Training Worth To You?

If you have always wanted to invest in commercial property such as apartment buildings, I can’t think of a better way to do so than through Master Lease Options.

You have 2 alternatives to get “up to speed” with your use of master lease options. You can either bump around the real world, make a few costly mistakes (like I did) and learn through trial & error… or you can go through my comprehensive online video training course to benefit from my experience and avoid the mistakes I’ve made.

Remember – You are learning from someone who has actively used this method to build up an investment portfolio worth several million dollars.

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