Daniel Stewart

How to Secure a Master Lease Offer

Investing in real estate is one of the most stable forms of investment, and many people each year become first-time investors by purchasing properties and renting them out. Unfortunately, this approach usually requires a lot of capital up front, leaving some would-be investors feeling locked out of opportunities.

Leveraging a Master Lease

The good news is that you can actually begin investing in real estate with very little capital required through a master lease offer (MLO) strategy. In a nutshell, this strategy involves the property owner assigning certain rights to a leaser who then sub-leases the property. Essentially, the leaser becomes a sort-of owner and property manager without actually owning the property.

How Does an MLO work?

With an MLO secured, you may be assigned the right to make renovations, determine sub-rent costs and work your way toward earning income through the property or even owning the property outright. If you have a performance master lease, you agree to pay the property owner a percentage of any profit you make from the property while the property is rented. In a fixed master lease agreement, you pay a percentage to the owner regardless of whether the property is currently rented or not.

Finding and Securing an MLO

While not all property owners will be open to the idea of an MLO, some will jump at the opportunity. These types will usually be ones who are out-of-town owners that are tired of dealing with long-distance management. Likewise, a property owner who doesn't want to deal with the management of renovations while also juggling tenant responsibilities may be a good candidate for an MLO contract.

Finding Properties in Your Area

One way to find properties in your area that may qualify for an MLO would be to run a rental property analysis using digital search tools online. By putting together an analysis, you will be better equipped to approach property owners with solid numbers to back up your offer. Keep in mind that you can do this for free, but there are also paid services that provide rental analysis data which may be more efficient.

Author Resource:-

Daniel Stewart advises people about real estate, property investment, property management and affordable housing schemes. You can find his thoughts at apartment investing blog. https://apartmentinvestingblog.wordpress.com/