All Forum Posts by: Loren Jacobs

Hi Aman,

When analyzing a commercial triple net lease deal a large part of your analysis is on the viability of the current tenant, which is, initially, not so intuitive.  Some of the questions you should be considering during your analysis of tenant viability are:

- Financial viability - does the tenant have the ability to service the lease agreement now and for the remainder of the term? What are the chances of the tenant renewing their lease? Turnover with NNN can be detrimental.

- Who and where is my tenants competition?  Is there any competition near by?  If not that could be good or bad, maybe the tenant didn't get the memo that this is a bad location for the demographic they serve, maybe not, either way this question deserves an investigation.  Is there too much competition?  Is the competition serving their demographic better than your tenant?

- What are the chances of your tenant wanting to move locations?  Over the term of the lease has the sub-market changed?  Are your tenants demographic moving to or away from your sub-market?  Will your tenant need to grow and expand into a new location?

These are some of the, not-so-talked-about, really important questions to analyze when looking at acquiring a NNN.

Hi Wilfred,

1.  Definitely ensure your posted rent is in line with comps in your area.  Prospective tenants may initially be interested, but, by the time their appointment to walk through the property comes along they may have found something else that is cheaper.  Take into account utilities and other aspects of your rental offering too when looking at comps in your area.

2. I strongly prefer a phone call.  It is much more personal and you can start to get a feel for who the tenant is and how serious they are by their verbal communication (which you miss via text or email).

3. We have a small application fee ($20-$35 is common from my experience).  This helps filter out the folks who will be wasting your time.

4. Make the applicants fill out your rental application first, review it, do the background and credit checks prior to scheduling a showing of the property.  There is no point in scheduling a showing and wasting everyones time if they are not going to pass your, hopefully stringent, tenant criteria.

5. Be patient, waiting a few weeks and getting the right tenant in your property is way better than rushing someone in you will be forced to evict later.

Best of luck my friend!

Unless that Broker has significant experience in your target market I would discourage working with them.  Each and every market, even sub-market, is very unique and requires a high level of experience from any RE professional to be successful there.  5 hours away is a long ways away.  Perhaps stay in touch and build a relationship to leverage knowledge but find another knowledgable broker in your target market. 

Here are some tried and true methods to find good brokers in any market:

1. Referrals - Connect with other industry professionals in Atlanta such as property management companies, commercial lenders, Lawyers with CRE experience, etc.. and ask for a referral, or even better an introduction, to brokers.

2. Go to local meetups, events, seminars and everything else multifamily in and around Atlanta. There are bound to be Brokers and several of the industry professionals mentioned above at these events.

3. Meet and align with other multifamily investors and owners. Build a relationship and ask which Brokers they have had success with in the past. You may find a partner and Broker, win-win.

4. Do some research on Loopnet, find a listing that matches, or is similar to, your criteria and cold call the listing Broker. Similarly, take a look at some of the major CRE brokerage sites like CBRE, Cushman and Wakefield, Marcus and Millichap, etc..
If you get an answer from cold calling a Broker here is my rough script:

"Hi, my name is _____, I see your listing on Loopnet at xyz, is it still available? What's the story? Ok, great, could I have some more information? Do you have other listings similar to this one? Here are my criteria..."

Hope this helps!

Hey @Jared Lomker, I found myself in your position not so long ago. I’ll compile what I’ve learned over the past three years to answer your question.

To add to @Chris Collins’ response, which was excellent, you’ll need to start by educating yourself on real estate investing. The more you know and understand difference niches of real estate investing the easier it will be for you to define your goals and vision. If your goals are still to get into multifamily and possibly syndication you’ll need experience to get started. You can gain experience several different ways.

1. Passively invest in an experienced sponsors deal. Keep in mind most experienced sponsors minimum investment requirements can be anywhere from $50k - $100k. The lowest I have seen was $25k. Furthermore, you may be required to be an accredited investor. If you aren’t sure what that means check out this article: https://www.investopedia.com/a...

If you don’t have $50k sitting around that’s okay, there are other ways to gain experience.

2. Start small. BRRR a single family or small multifamily (2-4 units) property. Manage all the steps from start to finish. While dealing with larger multifamily assets will be much different, there is a lot of valuable experience that comes with starting small. Then you could leverage your experience and move into a 6-12 unit apartment then a 20-40 unit apartment and so on.

Options #2 will also help set you up better for option #3.

3. Align with experienced sponsors. You will need bring something to the table that is valuable. Maybe that means you’ve found a deal and have systems in place to keep the deal pipeline flowing. Or, perhaps, you have developed a healthy pool of investors ready to commit to an opportunity. There are a lot of ways to be of value to an experienced operator but I chose those two examples because there are two things every syndicator is always looking for, deals and money. 

Hope this helps. If there’s anything else I can do to help reach out anytime. 

I walked through an off market property recently.  Before walking through the home I always ask some preliminary questions about the state of the property such as previous or existing problems, I always ask specifically about water problems.  The seller said there hadn't been any and were not currently any problems.  During the walk though I found several old signs of previous problems that seemed to have been "fixed" (old leaking drain lines and frozen water lines, etc..).  The seller conveniently remembered them when I pointed them out and mentioned they were no big deal.  We also ran across existing water damage in the basement, wet and moldy carpet, baseboards, etc.. I asked the seller about these issues and he denied having any prior knowledge.  I mentioned that I would like an inspection performed to see if the water damage was a simple landscaping problem or something structural.  The seller would not agree to having the property inspected or letting my contractor look at the property until after he had a chance to repair the carpet and baseboards, even after I suggested otherwise.  He clearly is not disclosing everything and is trying to cover up blatant problems.

Has any dealt with sellers like this before?  What is the best way to handle the situation? 

Thanks for your advice.

Last week I started a website and posted ads to attract private deals. To my surprise, they are working really well. I was so excited when I got the first phone call. I answered the phone and quickly panicked. I didn't have a plan. Had no idea what questions to ask or what information to gather. Now I'm gathering the basics on the properties (year built, # of beds/baths, sq ft, etc..). I'm open to wholesaling, fix n flip, BRRRR or buy and hold depending on the deal. My question is, what information do I need to gather from private leads? What should that first conversation and the overall process look like? What systems can I put in place to make the most of my leads? Thanks for your help!