Land Lease in Arlington - does it kill the deal?

[Andrew Webber]

Hey BP Community! Thanks in advance for reading and any comments/opinions.

I see an opportunity for a deal but am pretty confident that it does not make sense. In general, I am looking to buy and hold and rent out property while also looking for a place to live. I live in Northern Virginia where the home prices are very high, but I have been seeing that in Arlington there is one building, 2 stops from the metro, with amazing views of the National Monument and into DC, that is just ridiculously cheap. I look into the building to find out that they are co-ops and that the entire community is on a land lease that has no renewal clause. This is where I know I need to be done looking at the properties and to move on as when the land lease expires, technically you lose all ownership in the building and I would lose any value that the units hold. That being said, for some reason, I can't stop thinking about them and looking for some magical opportunity that others arent seeing. 

They rent for 1% (more or less) of their list price, but I found a set of 4 that are all being sold by the same investor that have sat on the market for 50 days (unheard of in this area). He is trying to coordinate all 4 of the units to close around the same date - so I imagine they are having a hard time finding 4 parties that would all agree/be that flexible. This is where I see some opportunity to make a bundle offer and get all 4 at a discount. If I could write an offer, get them all at a steal, and then earn more than 1% on rent it makes the deal very attractive. The listing agent also has in the listing remarks that the current owner is trying to sell them to do some 1031 exchange, so I imagine there is some eagerness to sell. 

A part of me, and this very likely could be wishful thinking, has a hard time believing that someone, the city government, the state government, the co-op association, etc isnt going to step in and find a solution for this land lease situation. Is this worth the gamble/risk? Is there opportunity here that I'm not seeing that others can help me to see, or can someone throw a bucket of cold water on me and tell me that I could buy these 4 units for $500,000 and lose all my equity when the land lease expires in 2052, OR I could be sensible and put my time and money into something that has a 1% return AND that will have "guaranteed equity" when everything is all said and done?

Thanks everyone!