[Drelise Homebuyer]

Drelise Homebuyer

I have a current fee base property management situation that I would like to change into a Master Lease. I wanted to know if anyone had a sample performance or fixed master lease that I could glean from to craft my own. Also, I would appreciate any advise on preparing and recording a mortgage to secure my interest with this lease.

Thanks again,
Karlus

[DON WEDE]

DON WEDE

Karlus,
I have David Tilney’s paper work but I will not share that. It is not that hard. Replace your position with “Master Tenant”, the owner with “Landlord” and your tenant with “Occupant Tenant”. Put some language in that a certain % of the rent collected from the Occupant Tenant will be due and payable to the Landlord. If the property is vacant and no rent is collected no rent is due. Just tailor and craft your old agreement to fit the new situation.

I do not see a need to secure the lease with a mortgage. In a simple deal like this I think it would just scare off the Owner.

Don Wede

[Drelise Homebuyer]

Drelise Homebuyer

Thanks for the insight. I have a couple other questions that I’m trying to work through that would be helpful if you could weigh in on.
1) Do you have any clauses in your lease that mitigates the risk of the owner defaulting on his mortgage which would in turn jeopardize your lease with your occupant tenant.
2) Do you have any lease provisions that cover you if the owner becomes insolvent and cannot make needed repairs.
3) In your lease agreement with the occupant tenant do you give any reference to your lease with the owner
4) Generally, how long of a term do you seek to tie up the property with the owner

Just trying to cover all bases, so any insight would be greatly appreciated.

[DON WEDE]

DON WEDE

Karlus

With questions 1 and 2 I do not address these specific items. I do have in both my Master Lease and my lease with the Occupant Tenant that I can terminate the lease with 30 days written notice. I also hold back one months rent from the owner.

I never discuss my agreement between the Owner and myself. It is not in any paperwork.

I like to go for a 5 year term, but would go 3 years if I had to.

Don Wede

[Jackie Lange]

Jackie Lange

every deal is different so there is no one right way to write this up.

for #1, you would never know there is a default on the loan unless yu have a deed of trust to secure the master lease recorded. You could include in your master lease that if there is a default, you can make the payment and get credit for 150% this works well if you have an option i place too.

#2 – same as #1

minimum 3 year terms, but you should also include a buy out clause just in case YOU want out early.

[Drelise Homebuyer]

Drelise Homebuyer

Thanks for the insight. I love this forum. I just wish I had known about it years ago.

Karlus