Master Lease Exit Strategy

[Adam Wigdorski]

So i own a decent sized portfolio. I can across another portfolio that me and the seeker came to terms with. We both decided on a Master Lease 5 year term with buy option.

Question

Upon exit of the master lease , in the eyes of the bank would this be a refinance or straight purchase.

Example.

Owner owes outright.

Lease buy option purchase price of 2,000,000

Now after I complete 50% renovations and Re manage rents the potential value of this deal will be worth 3,000,000-3,500,000.

My banks will give me an 80% ltv note any day of the week.

Upon executing the buy option will I need to bring 20% liquid to the table with the bank or will they use the built in equity difference between the buy option price and appraised current(5 years from now value)