What am I missing?

[Adam L.]

Hello,

What am I missing. Seems like NNN is a Slam Dunk At 6-7 Cap Rates.

If you can borrow at similar costs to cap rates and put 30-40% Down. Seems like a no brainier.

For Example

$2,000,000 property at 6.75 Cap

20 year corporate tenant . 10% increases every 5 years.

$700k down 1.3m loan at 6.5% amortized over 20 years

You would make $18k a year in Cash flow

Would pay down $31k a year in principal

After the first 5 years. The property value would increase 200k in theory because rents went up 10%.

just looking 5 years out

90k in cash flow

155k in principal pay down

200k in appropriation

446K gain in 5 years.

What am I missing? Wouldn't buying 1 every year or two make sense if you can come up with the down payment?

Obviously the quality of the tenant is paramount . Math looks horrible if they leave after 6 months.