Master Lease Options are one of the best ways for acquiring Commercial Real Estate Investment Properties with little to no money down! Even better, you can really mitigate the risk of your investment since you are ultimately committing to very little with the seller!
In 2013 there is really only one way to profit in Commercial real estate with out cash, credit, experience or risk. That is being able to master Commercial Master Lease Options techniques. Here’s how a Commercial Master Lease Option works:
First you identify an owner of an underperforming Commercial Real Estate Investment Property who no longer wishes to own or actively manage their property and negotiate with them to put a “Master Lease with an Option to Buy” on the property.
This “ Commercial Master Lease” in essence lets you control the property for a pre-determined period of time at a lease rate based on the current “under-performing” value. You will also include in your lease the option to buy the property at the expiration of the lease term at a pre-negotiated price based on the current under-performing value.
Then you would apply sound Commercial Real Estate management principles and increase the performance and value of the property, thus increasing its future value. You can even make cash along the way by banking the difference between your lease rate with the owner and your new higher income.
Finally, you can exercise your option to buy the property at what is now a discounted price, because you increased its value, or flip the right to buy the property to somebody else at a premium and keep the difference! The BuyersUtopia network of private equity investors is continually looking for opportunities to acquire off market commercial assets.
To do a Master Lease Option you will need a Sample Letter of Intent, an Option Agreement, Assignment of Lease Document, Assignment of Option Document. You need to get these documents right, if your looking for a great system of not only documents but how to find deals. Check out this video here.
Master Lease Options are a simple yet very powerful strategy for individual investors to control with very little money multi-million dollar commercial real estate deals.
The Commercial Master Lease Option Seller Gets:
• easy sale of the property
• lease payments on the equity of the property paid every month
• freedom from involvement in the operation of the property
The Commercial Master Lease Option Buyer Gets:
• a purchase involving no banks or lenders or appraisal
• all cash flow above the lease payment
• an option to buy at a pre-fixed price within a set period of time no matter how much the property value has increased
• all profits above the master lease agreement price
Commercial Master Lease Option Advantages:
• no banks required
• you and seller can get as creative as you want on the deal terms
• quick closing, low closing costs, closing as quickly as 7 days
• seller can generate good interest income per month
• buyer can create a good amount of cash flow and equity build-up
Commercial Master Lease Option Disadvantages:
• foreclosure by seller is easy if buyer does not perform per lease agreement
• it may trigger a due-on-sale clause on the seller’s existing mortgage
• seller may not perform his end of the agreement
If you are looking to do Commercial deals in 2013 you need to control the deal. Learn how to find, and properly control commercial deals here. Do you already have a great off market commercial real estate deal that you own or control? Contact BuyersUtopia at the top of the page.