With the do-it-yourself online sales cycle, it’s easy to feel like an expert in just about anything after a few minutes of research. However, when it comes to investing large sums of money in commercial real estate (CRE), whether you are an experienced triple net (NNN) lease investor or just entering the market, you need a personal representative.
But what type of personal representative do you engage? Should you use a CRE listing broker, net lease advisor, or go directly to the seller of the property you’re interested in purchasing? How will you know if the real estate professional you choose is reputable and will represent your best interests?
The difference between using a broker and a net-lease buyer’s advisor and understanding who is working for your best interests could be the difference between leaving money on the table or having extra money in the bank.
Net Lease Advisor vs. Net Lease Broker vs. CRE Salesperson
First, let’s look at the difference between a buyer’s advisor, a net lease broker, and a salesperson.
Net Lease Broker
The definition of a real estate broker varies, however, in our experience, most commercial real estate and net lease listing brokers tend to be focused on representing the seller, getting to the closing table as fast as possible, and earning a commission. Selling or listing brokers often can’t be bothered with the details or questions from an uneducated buyer.
The definition of a salesperson is one whose job it is to sell and promote products or services. Nobody likes to be “sold” anything. We seek to be heard, understood, and advised on the different opportunities and solutions that exist to satisfy whatever need we are searching to fill. A seller’s agent or salesperson in the real estate world is typically interested in one thing – getting the highest price possible for the client’s property.
Most CRE brokers and salespeople have one thing in common – the goal of making the sale by whatever means necessary.
A Net Lease Buyer’s Advisor
By contrast, a net lease advisor is just that – an advisor. He or she will advise and prepare you for your purchase, beginning before the property search, and guide you through the entire process to close. Your buyer’s advisor will handle the minutia of the transaction, with as little involvement from you as necessary.
A buyer’s advisor cares – he or she will get you to the closing table when all the transaction details have been addressed satisfactorily, and ensure that the impending NNN investment fits your lifestyle and financial goals.
Of course, there are exceptions to definitions and rules, and yes, there are trusting, caring real estate brokers and salespeople, but a true advisory approach is unique in that it puts the buyer’s needs first – before the sale. When the upfront consultative process primarily cares for the client’s needs above all else, it usually culminates in a real estate purchase that’s low-stress, comfortable, and ideal for the investor.
“A listing agent works to get the highest price for the seller, and a typical net lease listing broker looks to close the deal as fast as possible. Westwood Net Lease Advisors is unique in that we work hard to find the most suitable investment for your financial goals, and guide you through the entire process with ease, from the property search to closing, all at no cost to you.” – Jason Simon, Vice President, Westwood Net Lease Advisors
How to Choose a Reputable NNN Buyer’s Advisor
Regardless of whether you are a seasoned investor or new to triple net lease investing, choosing a reputable, trustworthy NNN buyer’s advisor over a net lease broker is an important step in the purchasing process. The first thing you want to look for when choosing a NNN buyer’s advisor is experience.
- Experience is not reflected in someone’s age, but by the organization and team behind the advisor.
- Experience encompasses the types of transactions the advisor has helped process and the uniqueness of those transactions – the various types of 1031 exchanges are a great example.
- Expertise is also reflected in how well respected the advisor is in the national marketplace. When your advisor is known and trusted within the NNN industry, his or her transactions carry weight and a priority status that provide you with a distinct advantage, such as the first right of refusal on high-demand properties and access to off-market properties before they’re listed.
When engaging a NNN buyer’s advisor, you also want to work with a person who is patient, understands the mound of paperwork involved, doesn’t skimp on the due diligence process, and has a network of professionals who can help you close the deal – whether that means working with your lender, intermediary, tax specialist, and legal team, or sourcing those people for you.
Why Do I need an Advisor if I am an Experienced CRE Investor?
Many experienced commercial real estate investors feel they do not need assistance with their net lease buying transactions, or they can just go through a listing broker for a quick sale. Seasoned investors often use a legal team and a group of other financial professionals to purchase properties, however, every CRE and NNN lease is different, and each investment transaction is unique.
The knowledge, advisory capacity, and up-to-date market information that an experienced net lease advisor brings to the table far outweigh any previous experiences one may have had when buying other properties. Knowledgeable advisors are also familiar with NNN lease terms and the corporations/tenants that operate under those leases.
Usually, attorneys, lenders, title companies, and intermediaries do not have the network of NNN sellers, brokers, and developers, nor will they have the clout with other net lease professionals that a well-known advisor will have.
Since single-tenant investment properties don’t stay on the market long or even hit the open market, getting your foot in the door on a NNN or NN+ lease property is nearly impossible without a well-known, expert net lease advisor working with urgency on your behalf.
The Westwood Net Lease Advisors NNN Buyer-Advisor Experience
When you work with Westwood Net Lease Advisors, we first set out to understand your goals – financial, family, lifestyle, and more. We assess your situation and objectives and answer questions, such as, are you an all-cash buyer or do you plan to get a commercial mortgage? Do you plan to live on the income from the NNN lease investment? Do you need the rent to service the debt on the loan? How much money do you have set aside if the tenant should vacate early? Do you want tax opportunities? Should the NNN property be nearby or is it okay if it’s in another town or state? And so on.
Knowing your goals helps us walk you through each important step in the process and narrow your scope, so the property search becomes most efficient. We then present sample NNN and NN+ investments, which helps us identify your risk tolerance further, and narrows the range of investments to those optimized for your specific situation and needs.
When we’re finished with discovery, we reach out to our national database of sellers, brokers, and developers to find an inventory of properties that fit your parameters and take it from there.
Personal Net Lease Buyer Representation at No Cost
Each buyer’s advisor at Westwood provides full representation at no cost throughout the entire investing process, from the pre-property search through closing, and thereafter. Our advisory also includes identifying and serving as a liaison between lenders, title companies, and cost segregation experts to optimize the entire transaction and minimize tax liability. Our specialized 1031 and NNN-lease advisors provide:
- Objective advice, education, knowledge, and advocacy.
- An evaluation, a risk tolerance assessment, and exit plan guidance.
- Exploration of the best prices, cap rates, and different investment class opportunities.
- An inventory of properties; including off-market options.
- Assistance with purchase price negotiations.
- Property and lease due diligence.
- A deep-dive into lease terms to ensure there are no hidden clauses.
- Presentation of a Letter of Intent (LOI).
- Evaluation of tenant financials and credit ratings.
- Expertise to guide you in financial and tax considerations.
- A national network of non-affiliated resources, title companies, legal counsel, lenders.
No other real estate brokerage or NNN lease investment firm in the nation primarily represents buyers and applies this methodical, advisory approach to the NNN investment process. Due to this approach, we have one of the highest close rates in the US.
To Wrap it Up – Engage a NNN Investment Advisor vs. a Broker for Optimal Results
When it comes to 1031 exchanges and triple net lease investing, engaging an advisor vs. a broker is the best approach to secure the most ideal investment in a timely manner, one that fits your financial and lifestyle goals and leaves you feeling confident about your purchase. Purchasing real estate is too big of a decision to leave to just anybody – a buyer’s advisor will ensure you get optimal results.
When you work with a NNN buyer’s advisor and 1031 specialist, you will be empowered to make the right decision for your specific situation and needs. The opportunity to purchase a prime property with a reliable, corporate tenant, cap rate, lease terms, and financing options goes up, and the ability to make informed decisions becomes integral to your profitability.
Even if you are a savvy investor with a full CRE portfolio, you would be surprised how an advisor can make your future transactions easier and potentially more profitable than going it alone.
At Westwood, we are true advisors, not order-takers. Our goal is to be your most trusted representative when it comes to buying single-tenant NNN properties or any other type of commercial real estate. To learn more or meet the team, contact us today. Our consultations are free. 314-997-5227