Master Lease Option question

4 Replies

I'm curious about the scenarios where MLO could be an attractive offer. I'm currently investigating an 8-unit multi that seems like it works on paper. I'd very much like to offer the seller (listed on MLS) an MLO.

Does anyone have any experience in a similar situation?  This would essentially be unsolicited.

Thanks!

Jeremy, I've used master lease options over the years.  Whether or not your offer is accepted will be wholly dependent on the mindset of the current owner.  Your offer would need to include the advantages that are in it for him:  one master tenant instead of eight, no tenants and toilets, possible sale down the road, etc.

The owner is in the mood to sell, it's listed and a MLO offer will probably meet stiff opposition from the agent, so you have to deal with the agent too.

I wouldn't approach this as a MLO, I'd go to a sale, seller financed, sub-to or an installment purchase through an LLC formed between the both of you. But chances are, the owner is looking for some cash.

It never hurts to ask, at least very much besides the pie in your face.

Now, if it has been listed for 8 months and there has been no activity, that might be different, the owner might be ready to bail out with a MLO. So, you need to get more information. Good luck :)

@Jeremy Pace   

@Michael Carbonare   and I have like 65 years between us using leases and options.

Like Michael said, 

WHIFFMs for owner, 

one tenant (you the REI)

ower gets someone improving the the property, 

guaranteed single payment based on NOI (Net operating income)

I have a bundlr set of links for MLOs

http://www.biggerpockets.com/blogs/3/blog_posts/42...

Brian Gibbons

@Michael Carbonare  

 @Brian Gibbons    - link bundle, awesome, thanks!

@Bill Gulley  

All of this information is very much what I was looking for.  as far as I can tell, this property has been listed a minimum of six months (most recent listing date) and the owner owes about three years worth of property taxes.  I'm still trying to figure out if this guy has passed away, moved, or otherwise just doesn't care.  I do know that it's fully rented, I own a triplex less than a block away, and have introduced myself to several of the current tenants.

Sadly, there are agents involved (as an agent myself, this is additionally irritating) and they don't seem overly excited about the prospect of selling this place.  I think there's a pretty good opportunity here.  If I play it right ... I've had pretty good success in the past with negotiating what I want from sellers, so this could be a real learner.

I'll try and update once/if I get additional info.

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