Looking for Another NNN (by Ray-N-Pa [PA]) Feb 6, 2023 8:31 AM
Looking for Another NNN (by Small potatoes [NY]) Feb 6, 2023 9:28 AM
Looking for Another NNN (by Ray-N-Pa [PA]) Feb 6, 2023 10:09 AM
Looking for Another NNN (by S i d [MO]) Feb 6, 2023 11:13 AM
Looking for Another NNN (by Wilma [PA]) Feb 6, 2023 1:20 PM
Looking for Another NNN (by Ray-N-Pa [PA]) Feb 6, 2023 1:28 PM
Looking for Another NNN (by Ken [NY]) Feb 6, 2023 1:57 PM
Looking for Another NNN (by MikeA [TX]) Feb 6, 2023 2:21 PM
Looking for Another NNN (by Ray-N-Pa [PA]) Feb 6, 2023 5:03 PM
Looking for Another NNN (by GKARL [PA]) Feb 6, 2023 7:46 PM
Looking for Another NNN (by Dodge [PA]) Feb 6, 2023 8:27 PM
Looking for Another NNN (by Otis [IL]) Feb 6, 2023 11:16 PM
Looking for Another NNN (by BRAD 20,000 [IN]) Feb 7, 2023 2:35 AM
Looking for Another NNN (by Ray-N-Pa [PA]) Feb 7, 2023 6:55 AM
Looking for Another NNN (by WMH [NC]) Feb 7, 2023 9:50 AM
Looking for Another NNN (by T [IN]) Feb 8, 2023 9:16 PM
Looking for Another NNN (by Ray-N-Pa [PA]) Feb 9, 2023 10:12 PM
Looking for Another NNN (by T [IN]) Feb 10, 2023 9:25 PM
Looking for Another NNN (by Ray-N-Pa [PA]) Posted on: Feb 6, 2023 8:31 AM Message:
I thought I would share how my site visits went for my search for my next NNN property.
The first property I went to was located just outside of Altoona. It is a Pizza Hut that appears to be about 40 years old. The shop itself is in an excellent location, the building does show differed maintenance and Altoona really isn't a growth market place. The restaurant itself had it's doors closed at lunch time so it appears to be using the DelCO (Delivery/Carry Out) business model so the dinning room wasn't available.
The second property I looked at was located in Kittanning. It is an all block building located just off of the Main strip in town. It appears as if this was a former gas station garage. The area where the pumps were at was subdivided off - which is good, but that places this building a half block back off the street. Another quality name rents this place out - Sherman Williams......but I am concerned that this place is so close to the river and the corresponding environmental concerns of the gas station. Instead of NNN payments, this was a modified gross lease structure.
Third place I looked at was over in New Kensington. It is a stand along building out in front of an old strip plaza. The building was small - I didn't see any customers coming in the 20 minutes that I was there, and there was evidence of a homeless person sleeping behind the building. Then again, you are about 10 minutes from .the 'Burg. So how much faith should I have in the success of Cricket Wireless?
Fourth stop was an Advanced Auto Parts located in New Castle. This building was newer, recently overhauled and located on irregular shaped lot. It was on the main street. Class D homes were on one side of it, with two of the four houses still with the fresh small charred wood. This place was set up only as a NN property with the roof and HVAC being the Landlords responsibility
The final stop for the day was a small strip mall about 45 minutes from me. This place did look the most promising. It houses a national non-profit county office, and two small local franchises - one retail and one restaurant. The roof does need to get replaced on at least half of this strip plaza.
This week I'll be looking into a couple of places just inside of Ohio. One is a national tenant chain and the other is a small Mexican Restaurant.
I figure I would share some of the concerns and steps used in finding that next commercial property. All of these places could be bought by the majority of posters on this site. That said, each of these purchases does come with its own problems/concerns. That is the nature of real estate. Hope this helps take some fear away from people wanting to try something new.
--24.101.xxx.xxx |
Looking for Another NNN (by Small potatoes [NY]) Posted on: Feb 6, 2023 9:28 AM Message:
Thank you, what made these areas attractive to you to begin with? I know you have said don't be restricted to your locality --172.58.xxx.xxx |
Looking for Another NNN (by Ray-N-Pa [PA]) Posted on: Feb 6, 2023 10:09 AM Message:
Excellent question.
I am using a local bank and they want me to pick up a place within 5 hours of it's offices. I start by searching areas closest to me.
I see the value in using the same bank repeatedly. They know me and know what to expect - likewise, I know typically the loan outcomes beforehand. I see value in having the yes to financing before I get an approval. --24.101.xxx.xxx |
Looking for Another NNN (by S i d [MO]) Posted on: Feb 6, 2023 11:13 AM Message:
Thanks for the info, Ray. This is definitely one of my favorite topics of interest moving forward in investing. The "little cheap ATMs" Class C 2-bedroom houses were great for getting started and they really pump out the cash flow, but I'm at a stage where I prefer the concentrated wealth and the value-add of getting creative with commercial property vs the never-ending hassles of dealing with marginal Class C tenants.
My best recommendation for anyone looking to get into commercial is finding large metal boxes with concrete floors and steel structural components. Hard to damaged and if you get the right zoning they can be used for almost anything. Second tip is find extra land along with these places that can be used for outdoor storage as it costs literally nothing to rent out and is pure profit.
Self-storage units are great, but they're hard to find and therefore fairly expensive.
Ideally, the NNN is the golden goose, but the silver goose is the Modified Gross lease / NN. I'm content with silver for now, but workin' up to gold like Mr. Ray!
--184.4.xx.xx |
Looking for Another NNN (by Wilma [PA]) Posted on: Feb 6, 2023 1:20 PM Message:
Traipsing all over western PA sounds like a lot of driving, but well worth it so that you can see for yourself. NNN properties are so intriguing - we may look into them ourselves.(No competition for you, Ray - we're clear over on the other side of the state!) --96.245.xx.xx |
Looking for Another NNN (by Ray-N-Pa [PA]) Posted on: Feb 6, 2023 1:28 PM Message:
A few years back I was eyeing a NAPA out in Carlie but it was located in a flood plain. If I go that far away, I want nicer places and this was not in a great location. It wasn't the hood, but it wasn't on the main drag in town --24.101.xxx.xxx |
Looking for Another NNN (by Ken [NY]) Posted on: Feb 6, 2023 1:57 PM Message:
Keep giving us updates,I appreciate it from both you and Sid,i have generally been class c rentals and low priced flips but am getting into better class of tenants and flips now --74.77.xx.xx |
Looking for Another NNN (by MikeA [TX]) Posted on: Feb 6, 2023 2:21 PM Message:
So what went into getting to this short-list of properties you went to look at? --209.205.xxx.xx |
Looking for Another NNN (by Ray-N-Pa [PA]) Posted on: Feb 6, 2023 5:03 PM Message:
good question Mike.
I used Sands Investment Group, CREXI, Loopnet, SRS, Avison Young, and CBRE websites.
Each of these sites have their own sorting tools but I was looking for NNN properties under 1.1M, Cap Rate over 5.9 and about three hours away from me.
At this low price point, you are typically trying to work out an issue with the tenant, but this allows for an extra value add to the property after you do work it out.
The hardest thing is trying to figure what that issue is before you buy the place. Is it something small like needing additional parking or something more difficult (and out of your control) like a change in consumer demand.
From that list I pull out the real odd ball places. The list starts out at over 200 places, but you are able to weed out lots of things that don't make much sense.
--24.101.xxx.xxx |
Looking for Another NNN (by GKARL [PA]) Posted on: Feb 6, 2023 7:46 PM Message:
Please keep us updated. I see myself moving this direction as well --209.122.xx.xxx |
Looking for Another NNN (by Dodge [PA]) Posted on: Feb 6, 2023 8:27 PM Message:
Thanks for posting, interesting topic to diversify. --174.203.xxx.xxx |
Looking for Another NNN (by Otis [IL]) Posted on: Feb 6, 2023 11:16 PM Message:
Thanks for the updates Ray. Sorry I couldn’t meet up with you on your recent trip to Illinois (life of a busy father). Really look forward to your posts and insight. --24.245.xx.xxx |
Looking for Another NNN (by BRAD 20,000 [IN]) Posted on: Feb 7, 2023 2:35 AM Message:
RayRay,
Check out Marcus Millchamp Co for commercial.
My looking has focused on Medical and Nursing homes (Silver Tsunami) and Dollar General. I like your idea of auto parts.
As the recession unfolds discount groceries and DIY repairs should stay solid.
Retail and restaurants are dropping like flies around here.
The world has already shifted to online. Even WalMart is promoting free delivery in one hour. Some stores are just hanging on, completing their leases.
BRAD
--73.103.xxx.xxx |
Looking for Another NNN (by Ray-N-Pa [PA]) Posted on: Feb 7, 2023 6:55 AM Message:
I can't measure this, but looking at the same Cap rates as I have in the past, and the quality of the tenant or the building just appears to not be what I am used to seeing. This is coming from my gut and without a way to measure.
One thing I have also screened out are places with long term leases in place. Rather, I am looking at places with options to renew as there are typically rent bumps at each option.
This is different than what I have done in the past.....the inflation affect --24.101.xxx.xxx |
Looking for Another NNN (by WMH [NC]) Posted on: Feb 7, 2023 9:50 AM Message:
I think the only reason I have heard of Altoona was reading about it in Mad Magazine back when I was a kid :) --50.82.xxx.xxx |
Looking for Another NNN (by T [IN]) Posted on: Feb 8, 2023 9:16 PM Message:
Ray- at least with DG, even with rent options... they will renegotiate the term. Most often at a lower rate or the same rate. My DG was supposed to have a rent bump of 5% and go for 5 yrs. They said nope... but will stay if you agree to a 3 yr deal at same rate. That was my lesson in the rent options feel good, but are the "equivalent of a deal on toilet paper."
For me looking through those sites... they seem high priced, low returns. Or not in good locations (Detroit area)... --170.203.xxx.xxx |
Looking for Another NNN (by Ray-N-Pa [PA]) Posted on: Feb 9, 2023 10:12 PM Message:
I have a DG myself. I haven't faced a renewal yet as it was new construction. This DG is out in the sticks of Southern Illinois --24.101.xxx.xxx |
Looking for Another NNN (by T [IN]) Posted on: Feb 10, 2023 9:25 PM Message:
New construction may be a different deal. This one, the first 15 yrs was locked on the previous owner. His builder screwed up on the roof height. Back of the building was 6" too low. So that meant DG couldn't do a 3 pallet high rack, just a 2 rack. That messes with their inventory schedule. So he got stuck with 15 yrs of locked in rent, no rent bumps. Had 3 5 yr options. Each with 5% rent bumps. 6 months from expiring, they call me. Not renewing with that option. We offer 3 yr, no rent bump. Plus we want a free month for signing it (eye roll)... I countered and we haggled.
Best part of DG, rent is always there on the 1st. I don't care what postal service issue is going on. The check is in the mailbox by the 1st. --170.203.xxx.xxx |
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