NNN/Apartment - Acquisition - Posted by Robert

Real Estate Investing Triple Net Leases
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Posted by Marc in Taos on June 28, 2006 at 10:27:22:

Bleah! I’d run from both. Too expensive.

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NNN/Apartment - Acquisition - Posted by Robert

Posted by Robert on June 22, 2006 at 02:28:28:

Hi,

I am trying to do my due diligence in deciding which investment is right to choose to start my personal portfolio. I am trying to decide between two different properties. I understand owning a residential vs NNN is more work compared to a NNN, but the long periods of vacancies on a NNN frightens me. Would some of you be so kind and give me some advice on how I would choose between the two.

NNN Property

Price: $1,285,000
Gross Income: $101,000
Expenses: $25,000
NOI: $76,241

Notes: Majority of tenants have 2-3 year leases (Dry cleaners, Pizza mart, Discount Smokes, Cash Advance), Closer to my personal residents, Built in 1976, Seller is willing to carry a contract, CAP Rate 6%

Apartment

Price: $1,295,000
Gross Income: $109,000
Expenses (excluding delinquency/collection lost): $34,000
NOI: $75,000

Notes: 100% occupancy, Built in 1999, Includes 9 storage units + Laundromat, Seller is also willing to carry a contract, CAP Rate 7%

Thanks…Robert

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Re: NNN/Apartment - Acquisition - Posted by Craig McCracken(AL)

Posted by Craig McCracken(AL) on July 04, 2006 at 07:33:46:

Please excuse my ignorance. I’m still very much in the kearning stage. My questions are what is NNN and CAP rate ?

Thanks for you time.

Craig

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Re: NNN/Apartment - Acquisition - Posted by Bill

Posted by Bill on June 22, 2006 at 13:22:31:

I wouldn’t buy either of them. The cap rate on the NNN is 5.9 and the cap rate on the apartments is 5.8

Ignoring closing costs, if you put 10% down, financed 90% at 6% for 30 years your annual cash flow would be -6,964. Why buy this?

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Re: NNN/Apartment - Acquisition - Posted by Patrick S. lawson

Posted by Patrick S. lawson on June 22, 2006 at 09:23:06:

I would go with the apartment complex. At the very least you will get better financing terms.

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Re: NNN/Apartment - Acquisition - Posted by ray@lcorn

Posted by ray@lcorn on July 05, 2006 at 11:08:42:

Craig,

See the following articles:

Cap rate: http://www.real-estate-online.com/articles/art-216.html

NNN: http://www.real-estate-online.com/articles/art-286.html

ray