Posted by phil fernandez on February 26, 2001 at 09:14:19:
I have never master leased an apartment complex, but I have master leased houses before and currently have one now on a house.
What I do is sign a lease with the owner of the house at $500/month with the right to sub lease it. I take care of lawn mowing and any maintanence item up to $100 per occurance limited to one occurance a month. I then leased the house out to MY tenant on a sub tenant basis for $950/month. The difference is my profit. If there are no repairs as mentioned above minusing the lawn mowing, my profit will be a little under $450/mo.
On this particular house which I have been master leasing for the past two years, I’ve been running about $400 profit per month. Not bad for not even owning the house.
A master lease on an apartment complex should work the same way. What you will have to do is do your homework and make sure you nail down the rents and expenses so you will come out positive for your efforts of managing the property.
Your sales pitch to the tired landlord on a master lease is:
1./ You are gurantying the rent to the owner.
2./ You are taking away his burden of managing the property.
3./ And if you insert a clause where you would pay the 1st $100 of repairs, then you are taking the small repair problem away fom the owner.
Now his apartment complex is on automatic pilot and his time is freed up to do other things.