All Forum Posts by: Jerald U.

At present it is December 14, 2018. The cap rates in Northern California are in the 3 to 4% range. If you get a loan, the rate will likely be higher than this cap rate range in the future. This seems to offset any tax advantages of investing in NNN leases. I realize that brokers want to earn a commission, and they will push these investments hard. But I do not see the reasonableness of these investments at present. you are better off holding cash, investing in short term treasuries, and waiting for a return to better cap rates. What do you think?

I am restricting myself to areas which I can access within one day of driving. owning real estate too far away makes visual inspection very difficult. I understand that brokers want a commission, and they will promote any type of investment as long as they get a commission. But as an owner, I believe that real estate must be visually inspected on a regular basis. I realize that some tout NNN as "never go and never see," but that appears to me to be too high a risk profile given the percent return received. What are the cap rates available on NNN leases in good areas? These rates appear to be too low, given the likelihood of increasing variable rate mortgages in the future. Does anyone disagree? If so, why?

I have been considering various NNN lease opportunities. In my area the cap rates are 3 to 4.5%. This seems very low to me. In the future interest rates probably will exceed this cap rate. There are the advantages of tax write-offs and property price appreciation. On the other hand, there is some real estate risk being assumed by the owner: building deterioration, earthquake retrofit, key tenant bankruptcy or relocating, etc. Is anyone investing in such a low cap rate environment today?? If so, what is your motivation?