Anyone Have Experience With Ground Leases???

[Won Lee]

I am looking at a deal in a small town where a ground lease has been offered to me(i.e.-just buying the land the building is on).

It is my understanding that the taxes and insurance will be covered by the tenants of a small strip mall(6 units) on the ground I will own. Most of the leases are 20-30 yrs in length.

I would have first position over the lending bank that financed the building it self is my understanding.

The ROI is very good. Even the parking lot maintenance is done by the building owner(he has a business in one of the units).

I know some banks and investors don't like to work with separate owners of the land and building but in this situation, the building has already been on the ground for decades producing income.

Are there any downsides to just owning the dirt???

Seems like a very low risk situation compared to buying the land and the building for commercial.

Thx.