Master Lease to purchase question

2 Replies

I am considering a master lease option to purchase a large apartment complex. This master lease will basically be like renting a rental business for a fixed monthly rent. I have a few questions:

Do I start my own LLC to operate under the master lease?
If I intend to purchase the properties at the end of two years, how should I save up for the downpayment from the profits: under the LLC or have the LLC payout to me, who then purchases?
Who pays taxes under a master lease? I know the owners pay the current mortgage, but what about the taxes?

@Jonathan Johnson best thing is to discuss with your accountant and attorney.

You should set up an LLC that will be the manager of the property LLC.

You will also want to set up an LLC to lease and operate the property. All income and expenses will flow through this LLC bank account including taxes and lease payments etc. When you go to execute the purchase the LLC will be the buyer and own the property.

Leave the profit in the property LLC for the future down payment so it's not taxed.

Also you could offer owner financing instead of a lease.