Case Study: New NNN Investor Closes on Dollar General Property Despite Loan Cancellation

Sep 3, 2020

Dollar General, New Baden, TX

June 12, 2020
6.25% cap rate

When a Las Vegas area physician, new to triple-net lease investing, decided she wanted to explore NNN options and buy her first commercial real estate property, she contacted Mike Kocur at Westwood Net Lease Advisors. Little did she know then, as her purchase of an absolute NNN lease Dollar General property moved forward, how beneficial it would be to be represented by Buyer’s Advisor Kocur.

Halfway through the deal, the bank canceled the buyer’s already-approved loan due to COVID-19, which meant she could lose this incredibly-solid Dollar General investment opportunity. When the bank delivered the news, Kocur came through fast with a solution and helped her close on the property, from which she earns approximately $80,000 annual NOI for the next 14+ years.

Step By Step to the top

The Process – From NNN Property Search to Close

First, Kocur got to know his client and her goals, spent time educating her and evaluated a selection of asset types and locations to ensure she chose the right NNN investment for her financial and lifestyle objectives. Since she continues to work, one of her main requirements was that the investment be 100% maintenance-free and reliable.

Kocur worked his vast industry network and located the perfect property for her goals: a one-year-old Dollar General in the heart of a growing area, not far from Texas A&M, called the “Texas Triangle.” This once highly-sought-after Dollar General is in a prime location with population growth projected at 3.5 million in ten years. It also operates with an absolute, corporate-guaranteed NNN lease, which allows her to continue to work in Las Vegas and simply collect rent every month with no landlord responsibilities.

Due to this Dollar General being an ideal NNN lease investment property, there was a lot of competition. However, Kocur secured the property for his client at lower than list price because Westwood Net Lease Advisors are known to represent qualified buyers and have the experience to overcome obstacles to get to closing without delay. And that’s exactly what happened!

recession-proof investment

The Obstacle – Her Bank Canceled the Loan  Midway Through the Transaction

As Kocur and his client were working through the sales transaction, COVID-19 was creating a lot of market uncertainty. Banks and other lenders began canceling commercial real estate loans and leaving many CRE investors in a tough position. Kocur’s client faced the same challenge but he wasn’t going to let her lose this opportunity.

Kocur reached out to a bank that he knows regularly lends for Dollar General properties to find out if they would work with his client. This particular bank, which also happens to be in Texas, likes lending for these properties because its mortgage staff knows Dollar General will pay their rent no matter what the market is doing – they even pay if there is a natural disaster and the building becomes unusable.

Kocur’s bank source was more than happy to lend his client the 70% she required to close the deal. In this case, Kocur’s representation ensured that the entire transaction, from the property search to closing, didn’t fall apart at any stage and moved along swiftly while his client carried on with her business.

Though sourcing the lender is typically a mortgage broker’s responsibility, there was no time to waste on this Dollar General transaction. Once the client’s bank canceled her loan, Kocur sourced the new bank and she closed on time. The advisory team at Westwood does whatever it takes to help their clients get the properties they desire, and this situation was no different.

COVID Watch – Is it Still Sensible to Invest in NNN Properties?

Even in the COVID marketplace, Westwood Net Lease Advisors is firmly rooted in the belief that NNN lease property investments are one of the best ways to earn income, build wealth, and maintain a solid investment strategy. NNN properties typically include essential or “needs-based” retailers with creditworthy tenants and corporate-guaranteed NNN leases. Tenants such as Dollar General, Walgreens, CVS, 7-Eleven, O’Reilly Auto Parts, and some fast-food retailers continue to increase sales, add employees, and evolve with the marketplace and COVID guidelines.

The Result – NNN Ownership & More Investments to Come

This new NNN investor engaged Kocur to venture into NNN property ownership and couldn’t be happier with the results. She now owns a management-free Dollar General property with a stable monthly income for the next fourteen years, lease extension options, and rent increases built in every 5 years.

In fact, she is so happy with the results, with Kocur’s assistance, she is in the process of planning her second NNN lease property investment. She values how the buyer-advisor partnership gives her a distinct advantage and helps make the most of every dollar invested, and loves the fact this Kocur’s representation costs her nothing.

To Wrap it Up – First-time NNN Buyer Overcame COVID-19 Obstacle to Purchase a Prime Dollar General Property

Utilizing Kocur’s expertise and lender resources, this Las Vegas physician was able to close on a new Dollar General property, even though her first loan was canceled due to COIVD. She met her financial and lifestyle goals with one of the best NNN investment tenants available and zero landlord responsibilities. She can continue to work, build a NNN CRE portfolio, and reap the rewards of stable, passive monthly income for years to come.

Mike Kocur Broker If you are interested in learning more about NNN Lease investments, contact Mike Kocur today, 314.266.2654, for a free, no-obligation consultation and learn how a buyer’s advisor can help you make the most of your CRE investments.

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