Master Lease: 1 Great Way get Started Investing in Real Estate and Achieving Financial Freedom without Taking Debt
You don't need to have a lot of money or any money, or credit or go to a hard money lender to create passive cash flow income and reach financial freedom with this investment strategy: a Master Lease
I’m going to show you one great way to start investing in real estate without
taking on debt guys.
Today I will show you one strategy what I call creative strategy that will help you get your foot wet as a real estate investor and its not gonna require a lot of money.
It won't require debt and it will help you get financial freedom through passive
Passive income guys so what is the strategy?
I’m gonna share with you right not but before I do I want to explain that most of the new when I first began the business I thought need to have lot of money I thought you need to have a good credit.
I thought you needed a hard money lender or a group of people to pool money to buy a property but in the past seven, eight years I’ve discovered many different ways you can get into the real estate business without credit or money.
One of these strategies is called Master Lease. I’m not talking about at lease with an option some people use a master lease and add at least with an option and they call it rent-to-own. That’s a different strategy but I’m talking about master lease and basically a master
lease is you’re here as an investor and then you have a landlord or home seller and
you market to them and you know they have motivations you go with third greed
because most homeowners think their home values gonna continue keep going up
because were in a bubble right now and so maybe they’re not willing to give you the
equity or they’re thinking three ore would be worth 10 ore grand or 15 more grand
or whatever the story is so you say okay no problem Mr. seller.
So you’re like why should I lease this from you and alleviate all the problems you got
to deal with fine new renters and accessory. I'll do that and ill just give you X many dollars usually what id like to negotiate is what I call PITI. Their monthly minimum payments to their underlying mortgage versus principal interest tax and insurance
So one a master lease is you then turn around and start marketing it to a retail
customers that want to lease a home. It could be anyone that’s one exit strategy and another exit strategy is like in a vacation area you can turn into a vacation rental or you can do AirBnB those are some exit strategies that I come up with.
You can chop it and do each room by itself or however you want it just do to the one
family that a couple exit strategy but it’s not about the exit strategy. Simply put a master lease is when an inventor finds a motivated seller they don’t
have to be motivated like a subject to or creative financing like owner financing
because the seller gets to keep their home or own it without the headaches and
you do a master lease. You turn around and lease it to somebody else. Lets say your lease from you turn around and put it Craiglist or put bandit signs to start marking it so get something positive. Cash flow that you can keep so once the renter pays you takes part of the money and then form there you paid a landlord his money.
Its theoretically once you know there’s complexity to it but it very simple so a
master lease has a lot of benefits. That an owner financing does it for example when I buy houses in Texas and I get the deed in my name if the breaks guess who has to pay for it when I have renters in there me I’m the investor I own the property if they know plumbing goes wrong underneath the slab or foundation guess who has to pay for it me dude if somebody steals my a/c me anything if the guys don’t flush I have a tornado coming if there’s any kind of problem.
I’m the one that has to pay for it all. So what does is it cost a lot money but one of the benefits with a master lease I that you’re just a renter so as for me in the situation to you know max the lease I’m just the renter from the landlord and then I’ve turned around and leases someone else a sublease of this person has a problem with the property which is right here they’d call me I called the landlord.
I’m just a tenant with the rights to subleases it which is very powerful because in
real estate there’s like different layers of benefits and some of us only look at one
layer like passive flow war we look at the ownership aspect but there’s different
other layers like tax benefits, deductions.
The cash flow or the appreciation and so on with a mass release what we do is we
allow the seller to keep ownership of the home and all the responsibilities that
comes with their pain attacks is your dealing with the disasters and we get the
benefit of what we want which is the control to have the positive cash flow it doesn’t
This situation is a really good situation for people. There are new people that are mental level or even experienced people.
Now why do I say that for all three levels well in a situation for example in some
markets its very low inventory sellers are watching TV.
Sellers know they have a lot of equity and some of them are not willing to give it to
you as 60 cents or a dollar repairs some just hand you over there deed because they
know they have equity.
There’s gonna be motivated sellers in all areas people have gone through divorcees,
job loss, and things of that nature but sellers know because TV saying is good, radio
saying is good so with this strategy a pro can go up to a seller and say look, I see it
for rent why don’t I just deal with it.
I’m good at eviction at finding people and screening them.
You could own this asset and you say its gonna go up mister seller ten, twenty
percent and I maybe agree with you so why don’t I let you own it so you can get the
appreciation and I take care of all the headaches for you and im gonna take the risks
and im gonna take the reward so that is a lot easier sell than saying to a seller hey
well give it to me as a subject to where I just take over your mortgage.
Some of the benefits again of a master lease:
One is that the investor like myself I don’t have to pay for the repairs and if you’re
ever a buy and hold buy is cost you a lot of money for repairs from just vacancy to
evictions to repairing stuff.
The second benefit of a master lease is that if the property crashes lets say you have
a match at least with the seller for five years and next two years of market crashes
there’s signs out there that the market can crash right stocks are all time high and
interest rate is at all time low.
The most debt ceiling in our government the yen I just did a video about that they’re
trying to beat the petrol dollars by backing to by gold so there’s a lot of stability and
that there’s turbulence in the economy so if you have a match the lease is not your
property but if you had bought with cash with hard money lending you know you’re
a fixed and flipper and the market crashes then because you did the numbers you
thought words worth but is not worth it, you’re stuck so its very powerful way to
control without the liability and the responsibility of it in a sense of you don’t have
to fix the stuff if it breaks .
You’re not that has to take the cash if it dips.
The other benefit is that it’s a lot easier sell everyone in there knows what land
lording is like you know if you’re a homeowner even if your first time what up being
a landlord is you don’t have to explain the idea to them so when you go tell talk to a
seller and say look I want to just lease your home you don’t have to spend 30 mins
or an hour educating him on what a subject 2 is or what is you know own or
You don’t have to spend time doing that because they guy already the seller knows
what you know land lording. Is where you gonna explain the property and give
social security numbers that you called along banker see. Its harder call pitch
especially in the market the way it is so it’s an easier sell which brings me to my nets
My next point is that because you have relationship with the seller lets say you ran
from him for five years and the past three years you’ve been performing really good
there’s no problem there was no headache the guy is loving.
If he’s thinking what if the guys decide to sell then guess what you have an insider
relationship with the seller so you have more advantage of getting the deal what is
the seller becomes motivated needs to sell who do you think he’s gonna trust?
The property has been doing it that is more willing to give the deal to figure it out
A master lease is a great opportunity to buy property for cash because you have
built that relationship with the seller and the seller is gonna trust you more.
Now we talk about the three benefits of master leases.
There’s two ways to do a master:
The first one is called performing, I’m gonna make your payments no matter if that
renter here pays me or not because the seller hey look no matter what happens here
I’m gonna pay you that’s performing. If the renter doesn’t pay me, I’m gonna pay the
seller if the house is vacant that one will require more risk but you can ask for more
rewards like if the seller mortgages piti principal interest and taxes.
While non-performing tells the seller hey mister seller if I get from the renter ill pay
If I don’t get rent which means nothing if I don’t have any property is not
performing I’m not gonna pay you so if the property is vacant you don’t pay him the
landlord pays okay. If the property is going to eviction and you’re not gonna
connecting any money then the landlord pays and the benefit is that the landlord
goes to keep the property to get all the tax benefits of depreciation.
Master lease is very powerful and they’re like two different animals host selling is
kind of like Rich dad or poor dad the fourth quadrant is in the S quadrant constantly
have to look for deals and that’s why I don’t like it down much but its a great
opportunity to start and create quick money without any money, credit, fixing
property just pushing paper but master lease in the rich dad cache board quadrant
is more of a be in a hot if you get ten of those to twenty of these and they’re working
on a mac system then it becomes business spitting out five grand, a three grand or
whatever it is ten, twenty your personal goals are a month for you at same time its
in the I quadrant because is the money working for you, you don’t have to be out
there like digging ditches for that are you’re not working for five bucks or fifteen
bucks an hour minimum wage or a hundred but you’re working hourly.
This is where you call a passive income because you don’t have to be there, it
working by itself.
You can keep your full time job or keep you full time entrepreneur like own a car
business moving business you don’t have to spend so much time doing this new
business because once you get the acquisition and there a passive assuming that
know how to qualify people so mass release is very powerful its greats for new
people. Its also great for medium people or top people because relationship opens
with the seller that you could buy the house down the line if you’re fixed and flipper
if you’re a lam buy and hold guy if you’re owner is financing you like to create notes
it doesn’t matter it build a great relationship.
The cons of it is there’s a couple of cons lets say you really wanted to buy the house
and in four or five the seller decides not to sell it to you because market didn’t go
down so maybe that could be a con of it another con is that you have to learn how to
market right fond these motivated sellers out there you gotten learn how to
negotiate and have good phone skills.
Another is you have to be a really good property manager you have to know when
you first start off because it is normal so as you go forward you’re gonna make
mistakes you have to learn from then.
To be a good property manager it takes a lot of people skills and you can get that all
these thinks free form learning from your mistakes. You got to spend a lot of time so
its not like you’re gonna need 100k or its not the rebel roll of track that cant spill
they can do we need this you know. I want to impact your life so I start and its all
about imagination and mindset.
Now lets talk about it I connate economy okay the master lease will work in up
economy and it ended in a down economy okay subject twos honored financing cash
buying properties deep they also work in a up economy and also works in a down
There are positives and negatives so each side has two to two sides.
Now what determines what did you get in that economy so in a positive economy
like what we have here there’s a flip side to it there’s a positive to it there’s not
much inventory, everybody wants to buy it.
There’s positive about it but the negative part is you’re not able to get to know
properties that deep is used to people just backing and just making lines for you in
2007 fourth-quarter 2008-2009 its not like that so you may only be able to get a
property 10% off 15% off.
The negative side of it is there’s not that many people willing to run into the fire to
buy your deals dude so what determines have you succeeded in a negative economy
cuz there’s positive and negative in it we get your mindset if your mindset is
negative and a down economy you’re gonna attract all the negative shit dude well
nobody wants it this okay if your mind is positive you can attract the positive stuff in
that down economy so its doesn’t matter if your up or down economy.
It doesn’t matter there’s positive and negative atmospheres what determines if you
get some of these riches is your mindset that’s the other magnet that’s gonna attract.
I want to help you because I’m so confident that if we work together you’re gonna
take your business level to the next level doesn’t matter if you have no money or if
you have a lot of money and everything. I’ve done it with no money I can show you
how to do it I’m working in America. Think about joining mastermind.