1031 replacement property- try a NNN net leased property

Need a 1031 replacement property for your 1031 Exchange? Forever leave the day to day management of your office building, apartment building or other gross-leased property behind.

Invest in a "hands-free" net leased property and spend your time doing what you want rather than dealing with tenant's needs.  Triple net leased properties (NNN) provide long term cashflow without the headaches of management.  Let the property work for you rather than you working for the property and enjoy the benefits of "mail box money".

Contact TMO to find out more about the benefits of Triple Net Leased Real Estate Investments. 1.866.539.1777

Here are just a few of the reasons why you should buy a NNN property for your 1031 exchange:

• armchair investment- ease of management with tenant maintaining and operating the property
• mail box money-  your monthly rent is yours, net to you, no expenses to pay
• long term cash flow-  leases usually range from 10 to 25 years
• high credit tenant- financially strong tenants usually publicly traded
• good appreciation-  regular rent increases provide for increase in future value
• non-recourse financing- lenders will loan on credit of tenant and strength of lease, waiving a personal guarantee by you as buyer
• easier to sell- when time comes to sell, demand is almost always strong for a NNN leased property, even in down markets
• higher residual value- net leased real estate is usually built-to-suit for retailers who have researched the market and location to find the best site to do business

Contact TMO to find out more about the benefits of Triple Net Leased Real Estate Investments for your 1031 exchange.

What is Triple Net NNN? Here is triple net lease definition

Current NNN Cap Rates

Here is a great chart of current asking cap rates for single tenant NNN deals. It is sorted by NNN tenant and NNN year built. Originally published in Western Real Estate Business May 2013. Data by Boulder Group.

NNN Properties and Your Future

NNN properties are a popular avenue for commercial real estate investment. These are typically single-tenant retail properties where the tenant is responsible for paying real estate taxes, providing their own property insurance and taking care of all property maintenance. Tenants take care of these expenses in addition to other monthly costs such as rent and utility payments. Part-time investors can find NNN properties to be an appealing real estate investment option. It offers a guaranteed stream of income from a real estate investment while also absolving the investor of carrying out many day-to-day management responsibilities for the property.

Other advantages NNN properties offer are significant. An investor can lock in a long-term lease with a tenant who sets up shop in NNN properties. They can enjoy tax benefits that come from investing in commercial or residential real estate. Finally, successful NNN properties can act as a gateway for securing additional financing to use on other investments.

There are risks in leasing out triple net properties to the wrong tenant. An investor needs to know how to identify a good tenant versus a bad tenant. Assessing the worthiness of any tenant requires an investor to examine a company's business model and the state of its finances. Signing up a tenant in haste can result in disaster for any investor.

A company's credit rating offers an indicator of risk for default. While no investments outside of a federal bond offer a zero percent default rate, a tenant possessing an investment grade credit rating presents less of a risk for NNN properties.

Leasing NNN properties to a company essentially provides them capital. An investor needs to know if their tenant can guarantee long-term success with that capital. Investors should examine multiple criteria when choosing tenants for their triple net properties. They should examine a company's debt to equity ratio, operating margins, the number of stores it operates, the outlook for that industry and how the company is managed.

Investors in NNN properties should also take into account other factors. A successful investment can hinge on everything from location and building size to economic conditions for a particular industry. Triple net properties work best for a smart investor who buys in the right location and selects a low-risk tenant.

Knowing local market conditions is essential for any serious investor. It is important to pay attention to everything from the employment rate to median income in a community before selecting a property. A bad investment can leave an investor with an empty building that is essentially a money pit.

In the end, NNN properties are a great passive income investment that produce low risk yields of 7% or more with little investor oversight and involvement. Contact Thomas to find out more about NNN properties or to buy/sell a NNN property: 1-866-539-1777 or e-mail.

NNN for sale - deals of interest

During the past few weeks I have been working hard evaluating NNN deals for several NNN buyer clients.  We have looked at many NNN properties for sale across the US.  In the process, I put together this short list of NNN for sale that may be of interest to you as well. Call or email me if you would like for information on these NNN for sale properties.  1.866.539.1777 CHASE NNN for sale in Texas $5,000,000 contact for cap rate The property is 100% leased to JPMorgan Chase Bank, N.A. on a brand new Twenty (20) year lease with Four (4), Five (5) year renewal options. The lease has built-in rental increases of 10% every Five (5) years through the base term and renewal options.

Advance Auto Parts NNN for sale in IL $1,520,400 7.25% cap rate Newly constructed property in 2011, 10% rent escalation in primary term, Long term lease of 15 years Located in primary retail trade area featuring Target, Home Depot and Lowe's

P.F. Chang's Corporate Ground NNN for sale in AZ $2,715,000 contact for cap rate Excellent traffic count - 108,000 vehicles per day on 1 - 10. Close proximity to major National and Regional retailers

Carl’s Jr. NNN for sale in Multiple Location, NV $2,100,000 7% cap rate Long Term 20 years NNN Leases, Rental increase every 5 year, Premier corner, Carl’s JR. is the 4th largest burger chain in America.

Verizon Wireless NNN for sale in SC $5,150,000 8.56%
 cap rate 100% leased to 3 national tenants, Traffic count exceeds 30,000 cares per day, Over 50,000 residents in 3 mile radius.

Contact TMO for more details on any of the above passive investments and net leased NNN property deals via email or phone at 1.866.539.1777 or twitter @andrusmorgan

Deals are a sampling of available NNN inventory from around the US and are for reference only.

Guest Blogger: 5 Things to Keep in Mind When Purchasing and Financing Your Single-Tenant NNN Property

Guest Post written by Colin L. Paterson, Commercial Mortgage Banker, BMC Capital, LP 5 Things to Keep in Mind When Purchasing and Financing Your Single-Tenant NNN Property:

Single-Tenant NNN Properties can be a great investment for investors seeking minimum management and optimum cash flow of their investment real estate. However, it is important that investors understand their risk when buying and financing a NNN property. While their are many variables to consider, there are 5 things that are of utmost importance to consider before purchasing and financing a Single-Tenant NNN Property:

1) Know your tenant and understand their financials. Since your property's value is directly related to the lease income, it is paramount that the tenant paying the lease income is financially viable. An investor should conduct a thorough analysis of the last two years and YTD balance sheet and P&L statements to make sure that the tenant has enough cash flow to cover it's fixed charges (rent and interest payments), and is not overburdened with debt.

2) Make sure the rent/sf is in line with market rents. Just b/c a NNN property has a high cap rate, does not necessarily mean it's a good deal, if the tenant is paying a much higher rent/sf than the market. Consider what another tenant would pay to lease the subject property if the existing tenant were to leave. Your real estate broker should be able to give you market rent comps.

3) "Location, location, location". This famous maxim holds true whether you're buying a single family house or commercial real estate. Thus, it is vital you understand the location, demographics, traffic counts, traffic generators, and what will drive supply and demand in the future. Note: a general rule of thumb for most lenders financing NNN properties is that they require the 5 mile population to be 50,000 or greater.

4) Length of the lease term: It is important to understand the lease term length and what your outstanding loan balance will be at the end the lease term. Most lenders who lend on NNN properties, require at least 15 years remaining on the lease in order give a 25 year amortization, if the LTV is 50% or greater.

5) Keep a reserve account. This is line with another famous maxim in real estate investing: "Prepare for the worst, hope for the best". Yes, even though you're buying a NNN property, it is essential that you are financially prepared if the tenant were to leave. The reserve account should be kept for 1) replacement reserves, in the event you as the landlord are required to make a capital improvements; 2)Tenant Improvements and Leasing Commissions (TILC), in the event the tenant were to leave and you have to find another tenant to move in. Yes, even though you're buying a NNN property, it is essential that you are financially prepared if the tenant were to leave and stop paying rent. Note: a general rule of thumb most lenders require is for the borrower to have a least 6 months of mortgage payments available in liquid assets to be used if the tenant were to leave.

While there are other variables to consider, keeping the above 5 things in mind before purchasing and financing your NNN property, will greatly increase your likelihood of investment success. Happy investing!

Guest Posted by Colin L. Paterson Commercial Mortgage Banker BMC Capital, LP Colin can be reached at 916-646-6334 or : cpaterson(atsign)bmccapital.com or  www.bmccapital.com