If you’re a real estate investor and you’re ready to be leave toilets and tenant issues behind, then it may be time to consider a 1031 exchange multifamily to triple net or 1031 exchange commercial to triple net. These NNN leases can be real winners, offering real estate investors ongoing income minus the hassle of ongoing tenant-related issues, as Ankit Duggal shares in this article:
Have you heard Brandon Turner’s toilet story? No? Then read the following excerpt, taken from the article ” Top 100 Ways to Make Money in Real Estate, ” especially if you are looking to become a buy and hold investor: “Have you heard my “toilet story?”
No More Toilets!
Quite simply, triple-net lease investing involves buying a free-standing building, which is then leased to a credit-worthy tenant (for example, a Dollar General store, a Walgreens, or a Burger King). What makes these leases so desirable? The tenant is responsible for operating expenses, maintenance, repairs, and replacements for the entire building and site, although capital expenditures are limited, usually in the final months of the lease. The lessee is liable for all of the property’s expenses, both fixed and operating.
Analyzing NNN Investments
Obviously there are many factors to consider when looking at the possibilities for a triple-net lease. The primary considerations are the real estate itself (the site as well as any legal issues), the tenant (their credit rating, sales history, and business plan), and the lease (clarity, rent analysis, and so forth). The details are many. Here’s what Duggal says:
Triple Net Investments (NNN) investments that have been carefully structured and underwritten can become a No Toilet Investment. However, these are highly long-term investments and before you commit capital to such a long-term investment vehicle it is vital to further study this asset class and complete a thorough pre-acquisition due diligence.
Triple-net lease properties can make excellent investments, but there are many factors to consider. The professionals at Pacwest Commercial Real Estate are your local commercial real estate experts. These specialists in triple net leases are only a phone call away. You can reach them at 541-912-6583 for the help you need!