What to Look For in Single-Tenant NNN Properties Long-term, single-tenant triple-net properties can be one of the most reliable forms of income- producing real estate ownership, provided that you have the right 1 location, 2 asset, 3 tenant, 4 lease, and 5 ownership structure in place.
First, what are zero cash flow properties anyway? These investments are highly leveraged property backed by a long term, bond quality lease guaranteed by investment grade tenant. These tenants are typically structured with a 20 year or more lease and have a high credit rating, at lease BBB.
Why would anyone be interested in a deal like this? Even though initially this might not sound attractive for an investor but their are a few benefits I would like to share with you.
You have the opportunity to own an investment with minimal amount of equity. Most zero cash flow properties are acquired with as low as 10 to 15 percent of the total value. This could allow an investor to acquire multiple deals of this nature, highly diversifying and spreading their capital.
Secondly, the financing is typically fixed rate, non recourse, assumable and fully amortizing. At the end of the loan term the property is owned free and clear of debt.
Along with previous mentioned points this structure is a low cost way to get tax benefits associated with ownership of real estate. Zero cash flow properties are very popular choices for estate planning, pensions and trusts.
Investors enjoy the income generated after the debt is paid off. The remainder income is left to heirs Zero cash flow properties are great uses for or exchanges. This allows an investor to quickly assume a loan at a low cost.
With the structure of these loans it also allows for the option for the purchaser to re-size the loan to match the particular deal that are looking to trade into allowing for great flexibility.
Their is also an option to refinance and cash out a substantial portion of equity after the exchange is completed. The cash from the equity can be used to purchase other cash flowing assets and remain complient of your exchange. Most Zero cash flow properties generate net taxable losses.
These losses can be used to off-set like kind income in the investors portfolio. The losses can be very high in the beginning periods of the loan to the point where the combined offset from the depreciation and interest expense can exceed the rental income.
This occurs typically in year 10 to 12 of the loan as the reduction of the loan principal and decline in interest expense over the course of the loan. Structuring zero cash flow deals requires a knowledgeable real estate broker who understands these type of investments and can advise investors on the long term ownership of these assets as well as to maximize any tax advantages.
Schedule your consultation today to discuss your investment needs and to get answers to your questions. We are the premier source for Zero Cash flow properties nationwide.
We have access and maintain a large on and off market database of Zero Cash flow properties and we are certain we can fill your needs. Below is a short list of opportunities:Single Tenant NNN Retail Properties. These are some of the better single tenant NNN leased retail properties available.
For more information about any of these listings, or other triple net properties though out the US, or to find a property that meets your requirements, please call John Bremner at Solid Investments specializes in Single Tenant NNN Triple Net Leased Property. We assist the Buyer in finding high quality net leased income producing property for those seeking to acquire an investment grade net leased property or satisfy a exchange.
Methods Used in Calculating Commercial Real Estate Triple Net Lease (NNN Lease) Example: Brevard Count Sale Tax = Six Percent (6%) In the above triple net lease (NNN) of $1, per month the rent would be $1, per month X = $ Total Monthly Rent.
A triple net lease (triple-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three "nets") on the property in addition to any normal fees that are expected under the agreement (rent, utilities, etc.).
Buy and Sell Commercial Real Estate. Trusted National Experts Since Free Exchange Services. NNN, TIC, Multi Family, Strip Centers, Shopping Malls, Office, Industrial and Hospitality commercial real estate properties.
What is a 'Triple Net Lease (NNN)' A triple net lease is a lease agreement that designates the lessee, which is the tenant, as being solely responsible for all the costs relating to .