FAMILY DOLLAR good or bad investment

[A.R Shakir]

I have seen a New Family dollar in a small town for 1 million at 8% cap rate and NN for 10 year lease. 

Any thoughts on Family Dollar as investment as I will be doing this as all cash? Its in Oakland,IL.

Just never done a NN(roof) and never thought of a Family Dollar as investment?

[Joel Owens]

Have no clue why you would want a Family Dollar NN in a cold belt state for an 8 cap and pay all cash??

Out of the 3 Dollar General is investment grade BBB- or better. Family Dollar and Dollar Tree are currently credit rated but not investment grade.

Investment grade tenants lenders tend to give the best loans on them.

I would only buy a Dollar Store if upgraded construction which is only about 20% of them today and it was in a strong location.

NN in a cold belt state depending on the lease you could have constant maintenance in a cold belt state for weather.

If you have 1 million then you might be able to buy a property in a 2 to 3 million dollar range. I would rather buy a 2 to 3 top with national tenants in a strong location for the high 7's or even 8 cap. In IL, WI,MI,etc. there are some higher cap properties right now.  Your dirt value is much better and with a loan instead of a straight cash purchase you could increase cash on cash another 2 to 3% and hit an 11% return versus a straight 8. Really the straight 8 cap is not an 8 cap when the NN maintenance kicks in.

In a small town like that sounds more better suited for  a local investor living there adding to the portfolio.

If you want Dollar Stores a Dollar General NNN in a stronger area for 7's in cap rate makes more sense.

I think we might have spoken a year ago on NNN but I am not sure.

All the best.