The vast majority of commercial real estate deals are “conventional” with regards to financing, meaning they are financed with a commercial lender requiring 20% – 30% down. But it's important to have other, perhaps more creative financing techniques at your disposal because they can get you into a deal when traditional methods fail.

One of those techniques is the master lease.

While the details of a master lease can vary widely, here it is in a nutshell using a case study scenario.

Let's say you're looking at an apartment building and have determined it's worth $1.5M based on actual financials. The building has problems: there is quite a bit deferred maintenance and as a result, the owner has about 30% of the units empty and he hasn't raised rents in the last 5 years. The building needs some TLC and better management. You think that if you sink about $120,000 into the building and replace the property manager, the building would be worth $2.5M.

Unfortunately, the seller is dead-set on $1.7M, and nothing less. And he's certainly not going to give you a $120,000 repair credit.

In this article, I'll show you how to purchase this property with no money down and profit $800,000 in 2-3 years when you sell it.

Read the entire article on Bigger Pockets.




The Secret To Raising Money To Buy Your First Apartment Building

Get commitments from potential investors so that you can confidently make offers and close on your deals. Enter your email address to get started.



Success! Check your inbox for your free e-book.

Where can we send your Calculator?

You have Successfully Subscribed!