Last night John K. of Colorado shared details about how he went from 0 houses and $0 cash flow to $10,000 per month cash flow in just a few short years.
And he did it all without going to banks and without fixing up houses… in fact, he did it without buying any of the houses!
Instead, he used a technique called Master Leasing.
A master lease is where you lease a house from the owner with the right to sublease it to someone else. The lease from the owner is about $200 per month less than you collect from the sub-tenant. Sometimes more. Sometimes less. Your average profit will be $200 per month per house.
John is currently master leasing 50 houses X $200 per month on average = $10,000 per month.
Here are a few of the questions that came up during the call:
How does he find an owner who will do a master lease?
He gets many of his leads from real estate agents who don’t see any profit in property management… they would rather go for the big pay day commissions.
He also does targeted marketing to out of town owners.
Why would the owner do a master lease instead of using a property management company?
Many property management companies will nickel and dime an owner with all their junk fees. There is usually a fee to get the property “signed up”, they want all or half of the first month’s rent, they jack up the bill 10-20% when repairs are made even though they only make a phone call, etc.
With a Master Lease all those junk fees are eliminated so the owner gets more cash flow.
Who pays for repair costs?
The owner still owns the house so the owner is responsible for repair costs. Sometimes with a Master Lease you would agree to pay for the first $50 in repair costs each month but that cost is passed on to the tenant. Unlike owning the house, when you do Master Leasing you don’t get stuck with any surprise repair bills.
Is managing the property a hassle that keeps you tied down?
Not if you learn how to select the right tenants to put in the properties. Tenant selection is the key ingredient to hassle free property management.
What was the most important thing that helped John learn how to have success with Master Leasing?
John attended a Master Leasing and Hassle Free Property Management class taught by the leading Master Leasing expert, David Tilney. David has 30+ years of experience Master Leasing. He only teaches one class a year. His next class is in October in Atlanta. See details at www.DavidTilney.com
Does it take a lot of money to get started with Master Leasing?
No! You will get many of the leads by just talking to people. With a Performance Master Lease, the first month’s rent is not paid to the owner until the tenant pays their rent. With a Fixed Master Lease, you could be responsible for the first month’s rent. That is why it is suggest that you start with a Performance Master Lease.
Could Master Leasing lead to other opportunities?
Yes it does! The owner could decide to sell and since you have proven that you will make payments on time each month, you are an ideal candidate to buy the house with seller financing.
You can make a profit by getting an Option then selling the house. Your profit is the difference between the option strike price and what you sell the house for. A Highest Bidder Sale could be used to sell the house faster and usually for a bigger profit.
Several other incredible opportunities were discussed during the call.
To learn more, listen to the replay of John’s call in the Coaching Call section after you log in to the Members area at CashFlowDepot.com
LISTEN TO THIS ONE HOUR AUDIO WITH DAVID TILNEY EXPLAINING THE MANY BENEFITS OF A MASTER LEASE
At CashFlowDepot.com. Module 7 has several hours of video training and audio training about Master Leasing and Hassle Free Property Management. (Members Only)
Master Leasing is an easy way to get started in real estate but it is also a great technique experienced investors can use to increase their cash flow.
Give Master Leasing a try to crank up your cash flow fast!
Best of Success… and Freedom,
Jackie
P.S. Replays of all Coaching Calls are available to CashFlowDepot.com members.
