Triple Net Investing

[Kurt Mace]

Hello everyone,

I currently invest in multifamily apartment complexes and I love what I do. However, I was looki ng into something more passive but still in the real estate investing sector. I was scrolling through some commercial properties and saw some NNN and NN leases. I know the differences between them but I have read that you have to be an accredited investor in order to invest in NNN leases. I am close to that mark but not yet. However, since there is a difference between NNN and NN; I did not know if you have to be an accredited investor for the NN lease. Can someone help me understand if it is the same qualification? Thank you.

[Ian Ippolito]

@Kurt Mace,  you don’t need to be accredited to purchase a triple net lease investment. You go through a commercial broker, and then you can purchase it just like you would your multi family. 

 However, there are some significant limitations that may make you want to wait until you are accredited. The biggest is that  when you buy on your own, you are not diversified and have all your eggs in one basket. So if one of your properties goes dark and stops paying, you may be experiencing 100% loss of income until you can retenant (which sometimes can be expensive and take a long time ).  Also, you’re probably going to be limited to the least expensive properties available, which may not give you the greatest return or be the best to choose from. 

 To get around those limitations, you can invest in a triple net lease fund  through syndication/Crowdfunding .  There are probably a few that are available to all investors, but most are accredited only.

 If you are not doing a 1031 exchange, then the big thing to look out for is that a lot of these assume that you are, and have big upfront fees.  I like Broadstone Net Lease  because it has very low fees, low leverage, a diversified portfolio of hundreds of properties, and diversified across asset types  and has an investment grade rating. The downside is that it’s not a fit for everyone, because the minimum is pretty high.