Commercial Real Estate Investing
Market News & Data
General Info
Real Estate Strategies

Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal



Real Estate Classifieds
Reviews & Feedback
Updated almost 2 years ago on . Most recent reply

FAMILY DOLLAR good or bad investment
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?
Most Popular Reply

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.
- Joel Owens
- Podcast Guest on Show #47
