Advanced Knowledge

In this video, Joel, Principal Broker, discusses the disadvantages of owning a multi-tenant property. Joel states that unlike a single-tenant property that is oftentimes just collecting a monthly rent payment with little-to-no maintenance, this property may require more work. How does a single-tenant property differ from this type of property? Unlike a single-tenant property that is oftentimes just collecting a monthly rent payment with little-to-no maintenance, a multi-tena

In this video, Joel, Principal Broker, discusses the typical ROI that can be earned by investing passively in a single net lease property.He also explains some of the additional income streams that are opportunities (which can) increase the ROI on your investment. Along with the additional income streams, he discusses ways to save money on the required down payment as well. What is the cap rate on this type of property? Typically when investing in a single tenant net lease p

In this video, Joel, Principal Broker, discusses the risks of owning a multi-tenant property. He also explains what the tenant rent typically covers and the key to making sure the property’s tenants are satisfied. Joel discusses what can help businesses increase sales, thrive in the community, and create happy relationships with the tenants to create a lasting business relationship. What types of risks are involved with this type of property/investment? Some of the risks inc

Investors that want to defer paying capital gains taxes use a 1031 like-kind exchange. The replacement property in a 1031 Exchange must be of the same kind of property sold. You also must hold both properties for business, productive use in a trade, or investment (26 U.S.C. § 1031(a)).A replacement property is "like-kind" to a similar relinquished property. Like-kind properties are not required to be the exact same - so how similar do properties have to be so that they are co

Are you interested in buying a triple net-lease property? Here is what to look for, in a lease, when you’re buying a property. The main components for a triple net lease that we will discuss today are: Triple Net A double net Ground lease With an absolute triple net property, the landlord doesn’t have to pay property taxes or insurance. The tenant pays for the maintenance of the property, property taxes, and each month you collect a check. This type of property is very pass

In this video, Joel, Principal Broker of NNN Invest, answers the question, “Does owning a single-tenant property help balance an investment portfolio?” Joel explains how the property is effected if the economy goes up or down, or if the stock market crashes. Should I have this type of investment in my portfolio? Having a single-tenant property in your investment portfolio can give the investor a good hedge with a lease that’s structured and provides stable and predictable exp

Section 1031 of the Internal Revenue Code, provides a simple, strategic method for deferring capital gain or recapture tax from the sale of real property. During the process of a 1031 Exchange, the property owner will distribute property that is meant for investment or productive use in trade or business. Once the property sells, the property owner uses the proceeds to acquire replacement property of equal or great value. The 1031 Exchange process is straightforward; followin

In this article, we discuss key points of a 1031 Exchange and buying a triple net retail property. Plan in Advance Planning in advance is a crucial element of a successful 1031 exchange. Once the property is sold the 45-day ID period begins and typically the family decides to take a vacation to celebrate. The issue is that the seller only has a few weeks to identify which property they would like to purchase in the exchange and after the vacation, no properties have been ide

I have often received calls over the years and talked to many thousands of investors. The initial call and inquires seem to have a common theme. The callers often say they are hearing of STNL NNN for the first time or have heard about it from a friend or colleague but are not quite sure what it is. They want more information to explore and learn what STNL (Single Tenant Net Lease) is. Single Tenant Net Lease is a tenant that solely occupies a free standing building. Most si

Often times I hear potential clients wondering what they should be looking for in a single tenant NNN broker? To know what to look for you have to understand the commercial NNN STNL space and how transactions happen which not a lot of people talk about. On the listing side with most major firms their structure is set up like this. If commission to the brokerage is $100,000 on the seller side of a transaction then about 50% ($50,000) goes to the main brokerage and the remainin

With real estate there are stabilized full value properties for purchase and then there is Value-Add. With STNL NNN there are lots of ways to add value to a property. Ground lease — Buy the land only. Since only buying the land the rents are typically 50% below market value. If tenant ever leaves, you can release to market absolute NNN rents because usually you get the building the tenant constructed for free. Buying an absolute NNN STNL property with an in-place lease and

If someone is an accredited investor they often get on people’s lists and get pitched all kinds of proposals for investments. Many are not even in the real estate realm. These companies are often wanting to talk an investor into buying anything at anytime. The more important question is for the investor. Do they like the track record of the sponsor? Do they like the type of strategy the sponsor is wanting to deploy and execute on? Do they believe in the sponsors vision and h

What is a syndicate? A syndicate is usually a structure whereby passive investors that are limited partners (typically accredited) invest in a specific property where the syndicator is the general partner. The general partner is the one who makes most of the decisions with the syndication. The syndicator puts out a flyer or offering about the specific property they want the passive accredited investors to invest in. The syndicator then fields inquiries about investing from

Owning a MTNL NNN property can often times be very rewarding but requires considerable more effort than a STNL NNN property. The misinformation is that there is nothing to do with research when buying a NNN MTNL property. There is a lot of review and steps that go into buying a good MTNL NNN property. Notice I said a good property. There are tons of mediocre to bad properties out there where a buyer could lose some or all of their down payment investment. Those are easy to bu

An MTNL NNN broker can have very different traits from an STNL NNN broker. MTNL NNN listing brokers often provide a package of services to property owners. In addition to selling a property for them, they also might do property management on the retail center and also leasing up of some of the empty spaces. Since these listing brokerages are often doing multiple functions at the same time they tend to be not as efficient as a transaction broker only, as their time is stretc

These are the items that are critical, and should be on your checklist for due diligence on any retail center: Condition of Roof (is there a warranty / does it transfer to buyer / roof type / are there more than 2 layers on the roof) Geological Reports (what type of soil / any known soil shifting issues / subsidence) Flood Zone Reports (FEMA maps / if not in zone, how close is the nearest flood zone) Development Agreements ( REA reciprocal easement agreements / CC&R covenants

The financing for centers varies greatly in comparison to single tenant properties. That is because, as you can imagine, instead of one tenant there could be anywhere from 2 to over 100 at a specific development property. So that can place tons of variables that alter what a lender will do for a loan on a property. In certain lower prices ranges of retail centers, say $2 million up to $10 million, most lenders are credit unions, local, regional, and national banks. With r

There are many variations and styles of retail centers that have been built over the last 50 years or so. Some different types of centers go in and out of desirability based on how people are choosing to live, and it changes over the decades. The Mall I remember growing up in the 1980’s you mainly had big enclosed malls. In smaller suburban areas that were emerging and growing, my parents drove me once every 1-2 weeks to the mall and it took 45 minutes to get there. Before t

A multi-tenant net lease (MTNL) is when you have more than one tenant, typically in a retail center, (although you could also have multiple tenants that are NNN in a medical building or an industrial building). The most common is a retail building. Unlike single tenant where all the income relies on one tenant, in multi -tenant the income is generated from multiple business owners. That can be a positive or a negative based on the tenant credit quality and structure of the l

People are often intrigued by hearing about STNL NNN but what does it mean? What kind of returns can you get? What is an active versus passive investment? Active investments tend to be real estate asset classes where you have to work and deal with headaches for yield. Those properties take up so much of your precious time and life force where you are dealing with constant problems instead of creating amazing life experiences and memories for yourself and your family. Exampl