NNN Lease Property Offer?

[Julian Rodriguez]

I have a NNN Lease property that is being offered to me at 2.5 Million in New York. It is a 12 unit property and the existing lease is for 5 years with the option on the tenant to renew after the 5 years for an additional 5 years. The seller is selling the property based on a 9% cap rate, all of the expenses will be covered by the tenant as stated in the lease. I have never purchase a NNN Leased property so my concern is that if the tenant does not renew after the 5 years I would be stuck with a property that I overpaid for due to the inflation cause by the NNN lease.

Just to be clear, these are apartments that were converted specifically for this tenant, so it is not a commercial space that I may be able to easily rent if the tenant leaves. I would have to find this type of specific tenant in order to make it work if he leaves.

So my question is what is a fair offer I could make to the owner taking all of that into consideration?

[Joel Owens]

You have to make sure the sellers numbers are accurate and that the finance terms you seek is reasonable and readily available for this type of property otherwise you could just be spinning your wheels getting nowhere and everyone wastes a lot of time and money.