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Four Key Points That Must Be

Negotiated in a Master Lease

When negotiating the terms of a master lease, use the negotiating techniques,

tactics, and strategies that I outline in Chapter 13, 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 lease.

2. The term of the lease: Negotiate a long-term (two- to five-year) lease.

3. The right to sublet the premises: Negotiate the right to sublease the premises

to a third party.

4. The right to assign the lease: Negotiate an assignment clause in the lease,

which allows you to sell the master lease to a third party.

Best to Use the LASH Strategy on

Small Mismanaged Rental Properties

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 at least $150 per

rental unit once the property turnaround has been completed.

3. Have mismanagement problems that can be quickly and inexpensively

corrected by implementing aggressive professional property management

practices.

4. Are structurally sound and have deferred maintenance that can be quickly

and inexpensively repaired.

5. Can be bought for at least 20 percent below market value on buyer-friendly

terms with seller-financed mortgage or deed of trust loans.


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