Lenders for NNN properties

[Anand Trivedi]

Hello BiggerPockets Members

I am looking into buying a NNN property and was wondering if there are any specific lenders that specialize in such dealings? I contacted my mortgage broker from chase and BOA but it appeared they weren't too much familiar with this.

I also have membership with Navy Federal and Penfed which generally has decent mortgage rates in residential. Is there any one like this in commercial space? 

Thank you,

Anand

[Joel Owens]

Hi Anand,

Yes there are specialist lenders for this product type. Within NNN there is STNL (single building) and MTNL (multiple tenants) in a building.

The underwriting varies based on which one as far as loans available. Length of the primary lease term, level of lease guarantee, location, quality of tenant (national,regional,local) plays a part.

There are many different types of lender (local,regional,national banks, insurance companies, CMBS, conduit, credit unions, private family office lenders,etc.) each has their own criteria within the space to do a loan on a property.

It would take me many hours to write a response explaining all the variances.

When people become my clients I already have the retail commercial attorneys, capital markets lenders, on and off market database of properties,etc.  If you are buying your first property in the space you will be going up against experienced buyers who purchase many properties a year. Newer buyers the sellers like to know they have an experienced broker behind them that knows the process and can help guide them along the way.

If you can say price range you are looking,state, STNL or MTNL, what loan to value, and what cap rate you are expecting then I can give you an idea if you are realistic or stop looking before you start. i review about a thousand of these a week for clients nationally so tend to know state by state what cap rates are at for what price range for NNN - STNL and MTNL.

There are a few books out there on the subject. Seller typically pays the buyer broker commission when you purchase a NNN property.