1031 Exchange for a NNN Property with 5 Days on the Timeline

Jan 15, 2019

Dollar General, Byhalia, MS

45 minutes south of Memphis, TN

Close date: January 15, 2019

Price 1,188,765

Cap 7.06%

NNN 1031 Exchange & Offer in 5 Days

A buyer without any NNN lease investment experience was actively looking for properties and ways to invest after selling a high-maintenance commercial property. He considered buying into a Delaware Statutory Trust (DST) and had also looked at local buildings, but still wasn’t sure what to do. He learned about the §1031 exchange from the Westwood Net Lease Advisors’ website and called advisor Phillip Bundren to learn more.

Once Phil explained that by using the 1031 exchange, he would pay no capital gains taxes from the sale of his other property and that he was basically getting an interest-free loan from the government, he was all in. However, following the rules of the 1031 exchange, he had to identify and submit – in writing – the property he intended to buy within 45 days of selling the other property. He had 5 days left! To add a little extra pressure to the mix, this fell around the Christmas and New Year’s holidays.

Strong-Credit Tenant, Great Cap Rate

Phil and this potential buyer initially talked on a Friday. After learning about the NNN lease stable monthly come and tax benefits, he decided right then that he wanted to move ahead and legally identify his new NNN lease property within 5 days. Our entire Westwood team collaborated to make this happen fast. We used our proprietary database and our industry contacts to find properties that fit his needs and had offers out the same day.

The following Wednesday we were moving forward with a selected property. He chose a non-local investment with a strong-credit tenant, Dollar General, over a local company and building. Due to the nature of absolute NNN investments, there is no landlord or owner involvement, so it doesn’t matter where the property is located. This allows us to choose the best investments from a nationwide inventory.

Investor accepted offer

Offer Accepted, Investment Deal Closed

Once we submitted the letter of intent and the all-cash 1031 offer to buy, the offer was accepted. Every advisor at Westwood banded together to make the deal happen fast, within the time frames set by the 1031 exchange tax laws. We worked closely with the buyer’s attorney, which saved the buyer from having to deal with the complex, time-consuming details.

Even with the inconvenience of businesses being closed and people being on break for the holiday season, we closed the deal mid-January. We now have a very happy client reaping the benefits of a high cap rate (7.06%), a reliable tenant, and a passive, stable monthly income.

Clock with money stacked

To Wrap it Up – Benefit from a NNN 1031 Exchange & An Expert Buyer’s Advisor 

If you think you may benefit from a 1031 exchange and the cost-free expertise of a buyer’s advisor, reach out to Phil at 314-563-2203, or the team at Westwood Net Lease Advisors for your free NNN lease investment consultation. 314-997-5227.

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