In the last 24 hours, I took a headache off a busy man’s (dad’s) hands, am hooking up an international student with a baby w/ new furniture, baby stuff, and a place to live, and borrowed 5yr funds supported by the cash flow from this deal to back-fill the equity I put into my last 50/50 fix/hold purchase, ALL WHILE WEARING FLIP FLOPS ;) , and most of the work will be done as I’m on a train to visit family in San Luis Obispo for Tday! ;) Thank you Real Estate! And I made a big mistake! See below..
Yesterday: Got a call from a too-busy landlord who wanted a reasonable price for their property (actually his dad’s property). I told him to call me if he's ever too busy and just wants a flat monthly rent whether or not the unit is vacant.. He runs his own retail jewelry/gold business, 6 children, even more commercial & residential units, and doesn’t have any time! I am renting out several units on a long-term basis from him already, and always pay early, with a smile, and buy precious metals from his shop when I visit to pay rent. Why him? Because I saw an opportunity for us to solve each other’s problems. Also, as Account Closed 's mindset about controlling RE. I didn't understand before. But now I do (more)! Looking forward to doing the podcast now that I have a little more time after the Summit..
I should get a Wholesalers Commission for all these Master Lease Properties! Haha! Just wait until he wants to give you an option to buy after you've run these properties! Great Job J. M. !
When you go to sign the lease, you should always try to nibble for the option down the road.
Great story. Too bad you can't find cash flow in the Bay area. Just like SoCal, it doesn't exist. I know you're really buying all these houses in Kansas. ;)
That's amazing! (fyi I saw the title and new it was you :))
Sounds like something I would do. Fantastic!
J. M. You are truly inspiring me! Thank you for sharing! Keep on doing what you do.
Ditto the inspiring comment. Congrats J. Very cool instance of turning someone elses problem into an opportunity.
Very cool, nice work @J. Martin
That's awesome man!
I'm kind of in the same situation as you were - got a burned out old landlord who's probably tired from his properties. Maybe it could work here as well...
John Rockefeller said it best, "Control Everything, Own Nothing!"
Originally posted by @Troy Fisher :
John Rockefeller said it best, "Control Everything, Own Nothing!"
Are you sure you understand he he meant? Just kidding. Yep, own nothing; control everything.
J, good job man. That's what real estate is all about. You get paid for solving other people's problems. Sometimes, the paycheck can be quite handsome. Enjoy the Turkey week with your family.
May the next one be just around the corner! Thank you for sharing. #happythanksgiving
J. M. Kudos, indeed!
Awesome work J. M. ! What a great story, thanks for sharing! Gobble Gobble!
1 week turnaround to create 60 monthly paychecks.
From phone call about the apartment up for grabs, to finishing rent-ready, getting new refrigerator, scheduling, screening, and signed lease w/ deposit & rent check in hand.
11/23 - 11:15AM
Get call from landlord I already have deals with, for his father's property. He doesn't want to deal with it.
11/23 -2PM - Put on sandals. Ride beach cruiser to property (near my apt). Unit almost finished being remodeled, but not quite. Needs final touches and a refrigerator. And a good cleaning from ceiling to floor after rehab dust. He tells me how much he wants for it. Reasonable, so I accept. Free Dec rent for finishing up to get rent-ready. (fridge reimbursed fully. I absorb the rest w/ free dec rent.)
11/23 - 2:30PM - Call handyman and cleaner to get unit ready. Take pics and video to put up for marketing. Order refrigerator for delivery. Had handyman buy a chandelier and ceiling medallion to add a little character back to Victorian..
11/25 - Unit finished and ready. I take calls & screen tenants. Schedule some showings and an open house for after Tday. Beautiful bay windows and 11ft ceilings. I almost moved here myself!!
11/30 - Sign lease w/ new tenant & get deposit. Original tenant I talked to had difficulty brining the stroller up the stairs and bailed out. Got different tenant. Tenant will move in next week (already paid rent)
12/6 - Tenant picks up keys from handyman and moves in.
5-yr cash flow stream created ;)
@Minh Le , this isn't an especially big paycheck, but it does come for 60 consecutive months without too much ongoing effort, so I'll take it! ;) And keeps my landlord/business partner happy :) I actually do prefer owning (if I had lots of capital). But these deals are a great way to replace the w2 income in the short-to-mid term and help support additional debt and equity building. Too bad that E Oakland 8 unit isn't $50-100K cheaper or I'd be ALL OVER IT!!! The alley doesn't kill it for me. I just need to see more exciting numbers for those kind of marginal properties.. Thanks again for the ride back down to @Johnson H. 's meetup in SJ.. Great time as always! Thanks Johnson!
@Troy Fisher , if you bring me a deal, I'll gladly pay you a commission! lol Like I say to Minh above, I'd still rather own, but I'll take this as a way to build that..
@Aaron Mazzrillo , I'm all about Cali. Its amazing what's out there when you talk to people and keep your ears open. Turns out my maid's family is selling a house in Richmond near some other rentals of mine, and one of the calls above may let me live on his boat for free for a few months... always wanted to try that! Only slept on a boat a few nights in canals in Amsterdam.. Good times! PS. I heard about a local tonight whose church was selling some buildings and needed someone to buy. Because he preys on the divine, he bought it and leased back to them.. ;)
I also wanted to give a shout out to a few other (bigger!) success stories recently done or in the works. Someone told me at the meetup in San Jose tonight that @Brie Schmidt closed on her 5 houses the other day, @Arlen Chou just got in contract on a really interested deal in Oakland the other day (1% on condos in the Bay Area?.. $100K (15%) discount to list, and seller financing, when neither was offered..? Awesome! Like Aaron and I say, there's no deals in California! lol And to @Kathryn M. closing shortly on the castle next to Lake Merritt (in if for the long haul ;) , and Eric Zou, closing on a new duplex in TX.... Congrats and good luck!
J. M. what is your master lease for and what did you rent it for? what is the delta.
I am thinking I might like this idea for some of my properties I am tired of screwing around with as a landlord... I find J martin clones let them make money instead of paying a PM. and I bet I get a much better outcome in this model .. From a tired burned out landlords perspective I like it. dual sources of repayment no vacancy and no headaches..
that's a win win
Master lease technique it's been around for very long time and Jack Miller was my teacher in the 80s
Anything you can recommend?
Master leases or master lease options
I am trying to figure this master lease stuff out. Is there any goto webpages?
From what I know so far, you get the owner to turn over control for a set monthly amount. Then you collect the difference if any on the rents. Who pays taxes, insurance and maintenance? thx again J.
leases can be written any way you want.. this is not earthshaking... its just negotiation. Its somewhat risky on J martins side as he is essentially guaranteeing the rents and making the delta... But in TOP end markets that risk is mitigated.. I the mid west or C class type rentals or even B - it could be suicide because of bad debt issues and tenant non pay issues. but you don't get that on the west coast as much or in the markets your interested in.
I could see doing it on some of my lower end stuff. I am thinking for a set guaranteed income to me.. I let the master lessee make lets say double what I would pay in PM.. but theoretically I never have a bad day... cash flow wise.
one would have to work out the maintenance issues and cap ex like you said and tax's and isnruacne... but to me its like a NNN deal... I would do that all day long as long as I was getting say a 5 to 7% return..let the mastyer leasee get the glory and the return I just want to sit on the beach and not worry about it.. Or in my case sit in the rain and shoot ducks.
I think Jackie is sitting in Central America sipping her fruity drinks :)
I am looking at this as an opposite strategy... not to create cash flow but as an owner to reduce headache and hassle...
Jay have you ever thought of Master leases in American strong holds such as Belize, Costa Rica, Panama?
Master Lease Option?
Buying and owning is tough but what ever about controlling?
I lived in New Zealand and Australia and sold on Lease Purchase once.
Thanks Jay. Can I ask...
What percentage of owners want option money?
For LA, are chances like seller financing?
The late Jack Miller did that,
I think that is why @Jackie Lange who worked for him at CashFlowDepot.com
is sipping Mai Tais
The Symbiotic Tenant/Landlord Relationship
The World According To Tenants
The World According to Landlords
Tenants and Landlords Want Different Pieces of the Same Pie
Legal Requirements of Landlords
Legal Requirements of Tenants
Focusing Upon Legalities Creates Problems
Motivating Landlords to Offer More for Less
Getting Tenants to Pay Higher Rents
How to Build Cooperative Relationships
Using Sweat Equity to Save Money
Using Options With Leases
How to Motivate Landlords and Tenants to Sign Long Leases
How to Get Landlords to Install Better Appliances
How to Motivate Landlords to Refurbish a Rental
How To Recover the Costs of Decorating Leased Premises
How to Get Landlords to Avoid Rent Raises for Years
How to Avoid Eviction For Non-Payment of Rent
How to Keep the Landlord from Selling Your Home
How to Build a Profitable Relationship With Your Landlord
How to Convert Your Landlord Into a Financial Ally
How to Use Options to Build Equity and To Recover Costs
How to Buy a Home Using Prior Rents for the Down Payment
How to Use Landlords' Connections and Credit to Buy a Home
How to Get Your Landlord to Reward You For Buying a Home
How to Get Your Deposit Back When You Move Out
How to Cultivate a Long Term Relationship That Will Endure
never had the pleasure of Meeting Jack Miller wish I had though
Jack Miller, Peter Fortunato, Jimmy Napier, David Tilney, Gary Johnston, Dyches Boddiford all have tens of thousands of my money, in training and education, better than Harvard MBA or CCIM.
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