Investing in Texas NNN

[Pete Harper]

I'm a long term buy and hold investor looking to diversify my portfolio. We currently own 38 doors of small multi-family apartments in Central Texas. As we grow our business I'm looking for options to diversify. We started off very hands on doing our own renovation work, we renovated 12 units in the last year anywhere from full gut reno to light reno. We did the self manage thing for a year but I've now turned everything over to a PM. My wife and chief painter, keeps reminding me we are supposed to be retired. With an eye to more hands off investing in the future I wanted to investigate NNN.

I see a number of properties in the $1M-4M price range. Starbucks, McDonalds, General Dollar, Autozone and etc  Most are advertised for a 3.5-4.5% cap rate.  Any advise on large National Brands vs smaller local mom and pop operations. Retail vs Fast Food?  Do you get a percentage of gross?

I hear financing is a little different for NNN compared to small multi-family commercial. Can I use cashflow to qualify for a loan? Typical down payment and terms? Seller financing an option? I have a good relationship with a small local bank willing to do portfolio loans. The only issue is they are only giving me 15-20yr term and that isn't going to cash flow at a 4% cap rate.

How hands off are NNN really?

Any good resources to learn more about NNN? Books, PodCasts, etc.