Passive, Triple Net, Freestanding, Real Estate Investments: 101

For those who have been subject to my snail mail Letters and Tweets and emails, my apologies.

The wife recently made me realize that in your everyday lives, when some one like me comes along and tries to make you aware of an investment and calls that investment a "passive" or "NNN" or "freestanding" or "real estate investment," you immediately conjure up the image of a nasty slum landlord who is only out to collect his money!  Oliver Twist anyone?

Then again, I am NOT pointing you in that direction of becoming a slum lord.  My intention is to allow you, who are most likely novices when it comes to real estate investing -- to enter into this lucrative world with as little anxiety or property management concerns as possible.

And, a "Triple Net" or "NNN" property is that type of venue.  And, these types of real estate investments are the most popular type of real estate ownership for someone new and in-experienced; and as well as for those who are well experienced.  These are investments for someone who is looking to get a better return on their money than through traditional Wall Street types of investment products that are probably presented to you more often than not by your business or financial money managers.

You see, as an owner of a property that has a tenant under a "triple net" lease, you just simply collect rent.  You are only responsible in actuality to cash said tenant rent checks. 

Another advantage is that even without a loan to pay off, you still gain equity while you own the property.  And, the tenant you acquired with the property is (usually) responsible to pay pre-determined annual rent increases as well as pay for the real estate taxes, insurance and maintenance on the building.  (There are different degrees of this, so be sure to call me with any questions.)  So, you can see, as the tenant stays through their lease term, their rent usually goes up annually and your costs are covered. 

Sure, in the last few years we have seen a decrease in RE values, and rents have decreased from the tenants who HAD moved out because they lost their business and could no longer afford the rent.  But, that happened to multi-tenant properties such a a shopping centers, Business Parks and even office buildings.

For freestanding, NNN, passive investment properties, that wasn't necessarily the case.  Thus, the current higher than normal demand for these types of properties, such as: 6.5% Cap Rates in middle America.  (Las Vegas Selling Cap Rates are +/-9%)

Also, during 'normal' markets, equity is accumulated over time.  And, as a NNN investment, paying cash for a property such as the ones on the right hand side of this page, you will NOT have the responsibility of a loan to pay off.  Thus, your Return On Investment (ROI) would be higher and sooner than if you had a loan to pay off over time.

So, be brave.  Be fearsome.  John Wayne made his fortune in Orange County real estate.  Why do you think Orange County named their airport after him.  Sure, he still did his movies.  And, because he was wealthy enough from his real estate investing, he got to pick his parts and to choose his co-stars!  He didn't HAVE TO settle for or even take a part he didn't really want because he never needed the money.  (Sound familiar to some of you?)

Also, for you with Non-Profit financing goals: A ten year lease by a Credit Worthy Tenant is money that can actually help the Non-Profit of your choice in your name by giving them a monthly income instead of a lump sum.  Your acquisition and assignment of the rent check to the Non-Profit, allows you to give over time.  (Talk to your Tax Preparer about this.)

So, call me.  Let's discuss this further.  Once you see the light that investing in a Passive, Triple Net, Freestanding, Real Estate Investments, is one of the best ways to earn while you play, you will NOT want to go back to business as usual. 

And, your real estate money will (help) pay for other things in your life that you are currently paying for from your Hollywood or Pro-Sports Money.  Think about it!

For Information about Las Vegas Commercial Investment Property, contact David Howes at: david@davidhowes.net or call (702) 502-9388.  Thank You for reading this!

One Comment

  • February 2, 2012 at 9:51 PM | Permalink

    Renting a home or place is easy than buying or sale. That reduce temporary confusion and straise of life.
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