NNN Commercial vs Multi Family

[Christopher Olsen]

Like the post says whats everyones opinion on NNN Commercial properties vs Multi Family. Do a lot of you have a mix in your portfolio. I feel like the big pros to NNN is very limited landlord responsibilities compared to Multi Family. Im no expert by any means and would love to hear everyones opinion on these two.

[Joel Owens]

Hi Christopher,

I didn't see this as it was in the starting out section and not commercial. If you go over to the commercial section I and others have given very detailed info on NNN investing.

I review about 1,000 properties a week for clients nationwide with NNN single tenant and multi-tenant focus.

Retail has high demand for buying single tenant investment grade NNN assets EVEN WITH the covid virus thing going on right now. Dollar stores not that big of a fan unless upgraded brick construction in a strong suburban area. Newly minted leases cap rate is lower but generally if lease has 7 years or more primary term left you can land typically higher cap rate and still get good debt on them.

Also I see some Dollar Tree takeovers of former pharmacies in good locations at lower purchase prices in the 2 million plus range.

The NNN market is fluid. The best properties often get multiple offers on them. A property I recently won for my buyer had 7 offers on it. Stuff doesn't sit around like people think at least the good stuff doesn't. I have been the multifamily route and a big PITA. At 45 years old I don't care to own that stuff or deal with residential tenants I do not care what the return is. You are working your butt off for active yield versus more passive yield with NNN. You can lose money in any asset class if you buy wrong.

Typically with my clients I see their liquidity and net worth estimate to know their buying range because various NNN quality properties are available in different ranges depending on budget. States have varying cap rate compression by remaining term left on primary lease, location with demo's, tenant credit grade rating if any, lease structure and terms, price range, asset type within NNN ( QSR, dine- in, bank, pharmacy, dollar store, auto store, medical,etc.)