Dollar General sale

[Nicole Moss]

There is a potential DG  for sale in a rural area.  It is heavily used.  cap is 5.36. Its about 700K is this a good deal.  I keep hearing bad things. About 6.5 years left on contract

[Joel Owens]

Are you doing a 1031 exchange?

Purchasing all cash or using debt?

No way would I do such a deal. Those properties have very little value with sheet metal sides and back often on well systems in rural areas. They have almost zero value when they go dark.

Example if I bought some run down DG with high cap rate all cash for 1.2 million but came with amazing dirt in strong location then I would just demo the building if they left and raise rent with another tenant with ground lease, build to suit, etc.

DG typically have flat rent. Most Walgreens now have some rental increases in primary term. If the 700k is a huge portion of your net worth would not buy NNN something small like that. It's a classic mistake I see investors make. They want to start small thinking that is less risky when it is MORE risky because the location is bad, the quality of construction is bad, etc.

I have been in NNN space for decades.