Posted by Mike-Ohio on February 14, 2011 at 09:58:20:
Thanks for the heads up. I have heard some bad things but thought the length of time the store has been there and the location it might have been a good thing to at least consider. What do you think about Dollar General and Family Dollar. I am looking to get into the credit tenants the cheapest way possible. Thanks!
Mike
Buying a NNN lease retail building - Posted by Mike from OH
Posted by Mike from OH on October 28, 2010 at 09:02:18:
Can anyone, hopefully Ray, shed some light on the best way to go about purchasing a NNN lease property. The one I have in mind is a Rite Aid building for $2.1 million. I am a smaller investor with an established LLC. All my experience so far has been with small duplexes and single family homes. The property will net approx $4-$5k per month after the mortgage payment. First, will the bank only be worried about my assets, experience and the cashflow? Second, what is the best way to come up with the down payment because I don’t have $525k for a 25% downpayment. Any insight would be appreciated.
Re: Buying a NNN lease retail building - Posted by wwalker
Posted by wwalker on February 12, 2011 at 05:19:42:
I’m a little surprised that no one has cautioned you against buying a Rite Aid, although I know your question is in regards to structuring a NNN lease. I work as a real estate manager for a national retail company and I would tell you to stay away from Rite Aid right now. Everyone in our business would probably agree that they are hanging on by a thread.
Re: Buying a NNN lease retail building - Posted by Chris Palmer
Posted by Chris Palmer on November 16, 2010 at 19:06:54:
We’re still lots of activity with investors looking for single tenant NNN leased buildings. Unfortunately, you’re going to have a difficult time getting the financing with you can’t put up a significant deposit, no matter what the other factors of the deal are (your credit, tenant’s credit, cash flow, term, options, etc.)
Re: Buying a NNN lease retail building - Posted by ray@lcorn
Posted by ray@lcorn on November 15, 2010 at 11:17:27:
Mike,
For help in evaluating a NNN deal, see this article: “The Risks & Benefits of Triple-Net (NNN) Properties”, the direct link is http://www.creonline.com/articles/art-286.html
The lender will be concerned with everything…
For the borrower; track record, credit, equity, net worth and liquidity.
For the deal; DCR (debt coverage ratio), location, lease terms, tenant financials and credit rating, comparable sales values, third-party inspections, title, and any special conditions.
To fund the acquisition you can put together a partnership with equity partner(s), or possibly cross-collateralize with other properties in your portfolio, assuming there is sufficient equity without going over 80% debt levels for any one property.
ray
Re: Buying a NNN lease retail building - Posted by john
Posted by john on November 05, 2010 at 15:54:40:
Length of lease is important. You’ll need a partner to come up with the down payment obviously. This will bode well for the bank as they can spread the risk by having an additional gaurantee on the loan. Don’t forget closing costs…That will probaly run you a pretty penny as well. How much skin in the game are you willing to put in for the downpayment?