Why mas­ter leas­ing makes sense

Calhoun Times - - FRONT PAGE -

also means you only got paid for Novem­ber and De­cem­ber, as­sum­ing noth­ing else hap­pened like a house go­ing va­cant.

That’s a long time to go with­out a pay­check, es­pe­cially if that is your sole means of in­come. Ab­sorb­ing th­ese sorts of cost be­fore your rentals are paid for can get hairy quickly.

So is there a bet­ter way while you’re estate build­ing?

En­ter lease.

A mas­ter lease, some­times called a sand­wich lease, is where an in­vestor rents a house from a landlord with the right to sub­lease that same prop­erty to an oc­cu­pant tenant. The in­vestor will rent it from the landlord for less than market rates, thus mak­ing a spread be­tween that and the rate the oc­cu­pant pays.

I learned this tech­nique from David Til­ney. He has the best and most com­pre­hen­sive course on not only mas­ter leas­ing, but also on prop­erty man­age­ment. Re­cently, the mas­ter one of his stu­dents gave an awe­some YouTube tes­ti­mony as to how well mas­ter leas­ing works.

The stu­dent’s name is Matt, and in the video he was kind enough to share his real world ex­pe­ri­ence. He said in only six years, he had amassed a port­fo­lio of 118 mas­ter leases – stat­ing that his av­er­age rents were $1,000 a home. Now, Matt didn’t tell what his spread was, but let’s use a hy­po­thet­i­cal 10 per­cent.

Ten per­cent of $1,000 a month on 118 homes is $11,800. Do you think you could live well on that kind of money? I know I could.

But it gets even bet­ter. Be­cause Matt is a mas­ter tenant, and not an owner, he doesn’t have to worry about all the re­pairs as­so­ci­ated with the prop­er­ties. In other words, that $11,800 a month is pure pos­i­tive cash flow and doesn’t change un­less the home goes va­cant.

Af­ter Matt’s tes­ti­mo­nial, and the year we’ve had, Ash­ley and I have de­cided to add as many mas­ter leases to our port­fo­lio as pos­si­ble. We’ve had suc­cess in the past with mar­ket­ing to ac­ci­den­tal and tired land­lords. But a re­cent mas­ter lease made us de­cide to look at an­other set of peo­ple — in­vestors.

We just did a mas­ter lease in Cartersville where the prop­erty was owned by an in­vestor’s re­tire­ment cus­to­dian. That means the in­vestor couldn’t man­age it him­self. You may be ask­ing your­self why he chose a mas­ter lease with us over a prop­erty man­age­ment com­pany. The an­swer is that he knows we will treat the prop­erty as if it is our own.

You see, we spend a lot of en­ergy look­ing for the right tenant. We learned the hard way you don’t just take the first per­son who comes along with the money. So we de­vel­oped a rig­or­ous process to find good qual­ity ten­ants. Con­se­quently, our ten­ants stay, pay and take care of the prop­erty for a long time.

An­other market we plan to ex­plore is “en­der” in­vestors. Th­ese are the in­vestors who have in­vested wisely, and are now re­tir­ing on paid-for rentals. As they leave to go travel, Ash­ley and I will be here to take care of the mul­ti­ple prop­er­ties they need man­aged while they en­joy their re­tire­ment.

Now, if you’d like to learn more on how to get into mas­ter leases, I highly rec­om­mended tak­ing David Til­ney course. Like I said, his style and sys­tems are sim­ply amaz­ing. To find out more, visit his web­site at www. davidtil­ney.com.

Joe and Ash­ley English buy houses and mo­bile homes in North­west Ge­or­gia. For more in­for­ma­tion or to ask a ques­tion, go to www. cash­flowwith­joe.com or call Joe at 678-986-6813.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.