Using Master Lease for Residential Property

[Thomas Morris]

My plan is to run my buy and hold residential business as follows:

1) The retail side of the business will be run as an operating company (OC)  that manages properties.  The OC will not own any property, but will have employees. 

2) The other part of the business will be a Holding Company (HC). This business will buy and hold properties, but do no property management.

The idea is that the OC will provide property management to the general public, as well as the HC. The OC will sign a master lease with the HC, such that the OC will have the right to sublet the property as it sees fit. As time goes on, I would expect to also offer a master lease agreement to the general public as well, instead of the traditional property management contract.

I would like to hear feedback on this plan, especially from people who have tried it. What are the pitfalls? How should the master lease be structured? I am considering offering a fixed lease agreement that would pay the owner whether or not the property rented. Thoughts on this arrangement?