Leasehold: Help with some basics? Renegotiation? Fee available?

[Nick Frostbutter]

Hey everyone, I have been doing some research into the leasehold (LH) market and I am falling short on some of the terminology and what it means. I also cant really seem to find any good resources to learn more. Hopefully the awesome BP community can help!

I think I understand the basics of a leasehold. You can by the lease that expires in XX number of years (say 2050). You pay for that like a loan or cash but it doesn't guarantee that you own the fee for the property after the lease expires. But if the fee is available for purchase, they you can buy the fee if you desire. You can make updates and changes like a normal SFH but you won't see any equity return unless you buy the fee. That pretty much sums up the basics, right?

What about the renegotiation date? What exactly happens when you get to this date, what are you "renegotiating"? Is it not a good idea to buy a leasehold close to a renegotiation date?

Does anybody know of any books or resource that talk about leaseholds? If so I would love to read them. I have been struggling for a little while trying to find any.

I know leaseholds are an uncommon beast (seems like just Hawaii/Honolulu these days), but maybe some of REIs that have done some work in the area can help? @Michael Borger @Jasmine C. @Isi Nau