27Some real estate gurus think that investing in NNN lease for sale is really simple. Some others think of it as equivalent to buying bonds. Whilst straightforward in nature, NNN for sale might be challenging to structure. Since you cannot amend changes later on, it would be wise to review the terms of the lease with due diligence to avoid any inconveniences in the future.
The Client’s Objective
While investing in NNN for sale investors have some objectives in mind; objectives that are not to be satisfied by your regular real estate investment. Pride of ownership, relief from management obligations, preservation of capital, and assured income are some of them.
To reap the benefits of exchange provisions, as an owner, you have to reinvest in real estate. What you are looking for is: a flow of income without the obligations of being a landlord. Moreover, having a prominent company as tenant is a matter of pride.
Others invest in NNN for sale as a mean to ensure ownership of something valuable for their heirs. So, they are ready to enjoy highest possible tax deductions, at the expense of a lower present income.
Although NNN properties for sale as a whole can fulfill your requirements, there are different types of NNN lease that you have to take in consideration.
A Lease Primer
Unlike regular real estate investments, think of a NNN for sale with the mindset that you are buying the lease, rather than the physical property itself.
Because the clauses of NNN lease vary, make sure you have a sound understanding of what should or should not be included. You may find out that the client’s objectives are not gettable, after all. Moreover, in brokers’ marketing manual the term is the other name of sheer misuse!
Once you have selected a property, get a copy of the lease and go over the details. Otherwise it may eat up a significant amount of time for contract negotiations, market studies, and inspection. Only one clause is more than enough to spoil the whole bargain.
A general lease takes the tenant to pay the rent and, as well as, other operational costs. Over the years, there have been many general gradations of net leases. In short you can categorize them from a strongest to weakest order.