OfflineI keep reading more and more about "Master Lease Options", and using them to buy apartment buildings using no money, no banks or credit. I have an apartment building under contract and haven't found a buyer yet. Since I locked this apartment building up under contract I have been saying to myself how I could really improve this property and have it 100% occupied if I owned it.
My question is how can I use a master lease option in this situation when the seller owes $390K on the building. He is willing to sell it to me for only $415K even though he dumped over $1M into it. I don't have cash or the credit so after reading and hearing more and more about this master lease option technique, I need to know if it will work in this situation and how? Also what documents do I use. Any help would be appreciated. Thank you.
The biggest thing you need to look into is are they willing to do this? If they are willing to offer seller financing for a portion of the purchase they are more open to this technique. If their main objective is to get cashed out, I would say they will most likely not be interested in this as it will not get them to their goal of being done now.
If they are interested in this option then I would take a look at what the cashflow is versus what they would require you to pay them on a lease per month. Would they still sell it for 415K of would they need more to do a master lease option. How long will they let the lease option be out before they will need you to exercise your option? Will you be able to turn the property around within that timeframe to be worth more than your purchase price based on the cash flow coming in. Will you be ablel to refi or sell to another investor at the point for more than what you purchased it for? I would look at these things first!!!
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