Ground or Master Lease

Lease your entire building or land to one tenant: Flexible. Maintain ownership and receive passive income without the typical hassles and expenses of being a landlord. A popular alternative to a sale or 1031 exchange that removes fees, 1031 exchange risk, and ownership responsibilities.

How it works

  • 1

    Lease to Flexible

    You choose the term, from 1-100 years, and the lease type: a Ground or Master Lease. Flexible will usually start making improvements shortly after the lease commences.

    With a Ground Lease, Flexible leases the land only and assumes all responsibility and expenses related to the structure. With a Master Lease, Flexible leases the entire property, land and structure. In most cases, we can pay a higher rent with a Master Lease because we do not assume responsibility for the maintenance and repair of major components, e.g. the foundation, roof, electrical system, plumbing, etc.

  • 2

    Receive passive income

    Flexible will take on the burden of keeping the property leased to our sub-tenants. We pay you monthly rent and cover most or all expenses whether or not we have.

  • 3

    Lease term ends

    Possession of the property and any improvements revert back to you or we can buy the property from you.

Benefits and Tradeoffs

Benefits
  • Eliminate landlord headaches- Lease your property “as-is” to one tenant, Flexible, that takes care of everything. Skip repairs, tenant issues, and vacancy.

  • Lower expenses, zero fees- Flexible covers all or most expenses usually paid by owners. A long-term lease means no vacancy, so no turnover or leasing costs, and no need to pay a property management company, saving you from management fees of 4-10% of your annual rental income.

  • Passive income- Receive monthly payments without ownership headaches.

Tradeoffs
  • Possibility of lower earnings- A standard lease might result in a higher lease rate than what Flexible offers.

  • Less cash upfront- Deposits from a lease transaction are typically lower than the cash you would receive upfront with other transaction options (e.g. an Easy Sale).

  • Continued ownership risk- By not selling, you remain exposed to the risks of ownership.

Ground Lease Example

You choose to lease your property to Flexible for 30 years using a Ground Lease. When the lease is signed, you receive a $20,000 deposit and agree to a monthly ground rent of $10,000 with 10% increases every five years for the duration of the lease term

After lease signing

You start receiving monthly rental income of $10,000. Flexible covers all costs, including property taxes, insurance, repairs, maintenance, and utilities. Flexible spends $250,000 to improve the property, and after improvements, rents the property out to quality sub-tenants vetted by our team. Since Flexible is your tenant, we’ll pay you rent while projects are in progress

Outcome

At the end of the lease term, you get the property back along with improvements, ending the landlord-tenant relationship and Flexible’s involvement with the property.

This example is simplified to exclude details that vary by owner and transaction, including the impact of taxes, tax savings, and miscellaneous third-party transaction costs.

Perfecting your terms

  • Lease type

    Ground Lease or Master Lease. A Master Lease comes with higher potential earnings and greater responsibility for possible major expenses. A Ground Lease provides lower potential earnings without the possibility of surprise expenses during the lease term since Flexible assumes all costs related to the structure. Owners that prioritize minimal effort and attention throughout the lease term choose a Ground Lease.

  • Lease term

    The duration of the lease agreement. The typical lease term is between 5 and 15 years. A longer-term usually results in a better starting lease rate.

  • Lease rate

    The monthly rental rate. While this is primarily based on market rental rates, Flexible can customize the amount you receive every month by fine-tuning other lease terms.

  • Improvement decisions

    The amount of oversight or approval rights you want over the scope and scale of Flexible’s planned property improvements.

Most owners...

Most owners who choose a Ground or Master Lease are trying to maximize income and total earnings. Usually, owners will provide Flexible with an Option to Buy. By giving Flexible this option, not only do you receive upfront cash that may be tax-free, Flexible can comfortably spend more on improvements since it has a chance to recoup the costs when buying the improved, and hopefully more valuable, property at a later date. Improvements give owners an added benefit: Flexible will be able to pay you a higher rental rate if it can increase the market rental rate it charges its sub-tenants by making improvements. 

A sale to Flexible comes with benefits, including saving 10% or more by skipping commissions and pre-sale repairs. 

When you request an offer, we’ll share options so you can choose your desired combination of offer features and make an informed choice. We can include preapproval to make changes after reaching an agreement so you have flexibility as the future unfolds.

Ground or Master Lease Pricing

  • The rental rate Flexible offers is the result of assessing our costs. As a general guideline, the less cash you require early on, the lower our costs, and we pass those benefits back to you in the form of a higher rent payment, and if applicable, a higher purchase offer price.

    Here are the best ways to maximize the rent we pay and your total earnings:

    • Tenant improvement allowance: If you have extra cash, you can fund property improvements which allow us to pay a higher rent, giving you a strong potential return on your investment.

    • Longer lease term: The longer the lease term, the more time we have to recoup our upfront costs, allowing us to pay a higher rental rate.

    • Option to Buy: By giving Flexible the right to purchase your property at a predetermined price on a future date, we will pay a higher rental rate.

  • Flexible reviews recent comparable rentals, and if applicable, sales, then makes adjustments based on your property’s unique features. We’ll come up with a plan that achieves your goals and maximizes investment potential so we can maximize the rent we pay, and if applicable, our future purchase price. 

    The rent and pricing we offer are 100% transparent. You’ll see the data used to determine our rent and pricing, and since we don’t charge commissions or fees, the number you see is what ends up in your pocket.

  • In most cases, Flexible will make improvements, and rent the property for more than our operating expenses and underlying rent payment to owners, resulting in positive cash flow.

See if a Ground or Master Lease is right for you

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Frequently Asked Questions

  • With any kind of lease structure, including our Ground or Master Lease, you remain the owner. This means you can refinance, giving you tax-free cash with a long-term fixed interest rate. Since it's a rental property, you can deduct the interest which reduces your taxable income.

  • A typical lease will often result in a higher rent, but it comes with higher costs, including hiring a property manager, leasing fees, turnover costs, most repairs, utilities, and other operating expenses—all things that go away with a Flexible Ground or Master Lease.

  • In most cases, Flexible will renovate or remove the existing structure and develop a new one. In all cases, you’ll have the right to approve our plans prior to entering into a lease agreement.

  • Every property is different, and our improvements are often designed to capture demand from a specific use and tenant profile. All sub-tenants at Flexible properties go through a rigorous application and screening process prior to lease approval.

  • Depending on the lease term, we’ll build in fixed rental increases every 1-5 years.

  • Our offers are customized to maximize the collective ownership group’s satisfaction. Flexible will ensure each co-owner receives the terms they want, whether it’s cashing out, remaining an owner, or both. You tell us if you want us to work with a single contact, the group, or individually with each co-owner.

  • We’ll work with you to coordinate our onsite inspections and collect property information as part of our due diligence. If certain materials are not available or easily accessible, our team can help.

Flexible’s Love Your Offer Guarantee

Typical transactions prohibit owners from canceling or making changes. With Flexible, you get seven days after accepting our offer to cancel your agreement—no questions asked.

Why owners choose Flexible

Better experience, better outcome

  • +Skip months of hassles.
  • +Save hundreds of thousands: no commissions or repairs.
  • +Explore all options—no commitment required.
  • +Get a same-day offer that achieves your goals.
  • +Get transparent and competitive pricing.
  • +Secure fast closing certainty.
  • +Close on your timeline.
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