Master Leases and Real Estate Options

After you have used credit and criminal background reports and other sources to check, verify, and evaluate a tenant applicant’s personal and business information, you must decide to accept or deny the applicant based solely on whether he or she is a good business risk and not on personal prejudices. The following are four examples [...]

You must thoroughly screen all tenant applicants uniformly in order to avoid renting to immature, uncivilized, financially irresponsible, and management-intensive people, better known as tenants from hell! The best way to weed out potentially undesirable tenants is to check, verify, and evaluate their: 1. Credit history. 2. Criminal history. 3. Rental history. 4. Income. The [...]

The number one reason for landlord failure in America is lax or non-existent tenant screening procedures. And that is exactly why tenant selection is the single most important aspect of the entire rental property business. Tenants who are mature, conscientious, civilized, and financially responsible adults are the lifeblood of any profitable rental property business. The [...]

Face it: America is overpopulated with board-certified, repeat-offender tenants from hell, who specialize in bilking ignorant, unsuspecting landlords out of millions of dollars in unpaid rent and property damage annually. Here are six steps that you must follow when selecting tenant applicants to avoid being victimized by the numerous tenants from hell: Step 1: Establish [...]

There really is nothing complicated about managing residential and commercial tenants. You do not need 100 hours of dry, dull, boring property management courses or 10 years of property management experience in order to be an effective property manager. As far as I am concerned, property management can be best summed up in these four [...]

My favorite type of LASH property is a small (2to 12-unit) mismanaged residential rental property, which is made of masonry (cinder block) construction and has single-story, side-by-side, separate-metered rental units with off-street parking. I specialize in this type of LASH property for the following five reasons: 1. Rental properties made of masonry construction are pretty [...]

You do not need to be a property management whiz to be able to quickly identify a rental property that is suffering from gross mismanagement. All you need to do is just look for the following six telltale signs of property mismanagement: Sign 1: Property and grounds are suffering from an obvious lack of routine [...]

The four types of property mismanagement that affect many rental properties are: 1. Tenant mismanagement: This occurs when there are no tenant qualification standards, screening requirements, or eviction procedures in place. Tenants are selected strictly on a “first-come, first-served basis,” and there is no sense of urgency when it comes to evicting tenants for nonpayment [...]

From my experiences buying mismanaged rental properties, I have found that incompetent ownership is the number one reason that rental properties end up being mismanaged. This incompetence has a snowball effect and is the direct result of the owner ’s: 1. Lack of knowledge about the local rental market, which results in rental units being [...]

Just as all properties are not option properties, not all properties are LASH property candidates. The LASH strategy works best on small mismanaged rental properties that: 1. Are located in stable, low-crime, moderate-income neighborhoods near large employers, military bases, schools, shopping centers, and healthcare facilities. 2. Have below-market rental rates that can be increased by [...]

When negotiating the terms of a master lease, use the negotiating techniques, tactics, and strategies that I outline in Negotiate Low-Cost Options and Below-Market Purchase Prices with Property Owners, and pay special attention to the following four key points: 1. Monthly rental rate: Negotiate a flat monthly rental rate for the entire term of the [...]

Here are three ways to protect your position as master lessee during the lease period: 1. Record a memorandum of lease, like the sample in Chapter 5, to give the public constructive notice that you have a leasehold interest in the property. 2. Buy a leasehold owner ’s title insurance policy to insure your leasehold [...]

Include the following provisions in all of your commercial sublease agreements: 1. Parties. 2. Agreement to sublease. 3. Legal description of the property. 4. Term of the sublease. 5. Holdover. 6. Sublease rental rate. 7. Security deposit. 8. Indemnification of lessor and sublessor. 9. Services and utilities. 10. Use of premises. 11. Signs. 12. Waste, [...]

Please do as I told you in Lease and Option Strategy to Make Money with Single-Family Houses and always use separate master lease and real estate option agreements to document your LASH transaction. Whether you buy a sample copy of a valid lease agreement from a professional association or hire a competent real estate attorney [...]

The term valid lease agreement refers to a lease that has been approved—usually by the real estate attorneys working for a professional association—for use in your state. You want to always use a valid lease agreement, approved for use by a professional trade association, because it will pass legal scrutiny in court. I recommend that [...]

In a LASH transaction, there are three parties: 1. The property owner, who is the landlord or lessor. 2. The tenant, who is the lessee and the sublessor. 3. The sublease tenant, who is the sublessee. There is really nothing very complicated about how the LASH strategy works. It is nothing more than the old [...]