What you won’t hear from other commercial real estate agents and brokers is that net-lease investments are not just about the cap rate nor about spending every dollar you have on one property. You won’t hear them say triple-net lease (NNN) investments are a great addition to a diversified portfolio or that consulting a net-lease advisor could save time, money, and effort. And most won’t spend time to build relationships and find just the right property for their buyers’ goals – they are all about the fastest sale at the highest price.
Read on to learn what a reputable, experienced, and caring buyer’s broker or specialized net-lease advisor will do to help you secure the ideal NNN lease investment for your lifestyle and your financial objectives. And, contrary to what most people think, engaging an advisor costs the buyer nothing – in fact – it saves money, time, and costly mistakes.
How a Net-Lease Buyer’s Advisor Saves You Money
It is a misconception that a commercial real estate broker or triple net-lease advisor costs the buyer extra money in commissions. This is false – compensation and/or commission is built into the pricing of the property and paid for by the seller. And, just like with residential real estate, the commissions are split between the selling agent and the buyer’s advisor, costing you nothing.
A buyer’s advisor is a personal representative who looks out for your best interests – where the seller’s agent is trying to get the highest price for the seller. Even the most experienced real estate investor can make costly mistakes by not knowing the intricacies of the industry or using a seller’s agent to help buy their desired property. A seasoned triple-net lease advisor can save you time and money by being your personal representative. We provide the market knowledge and help you decode inflated cap rates, avoid mistakes, negotiate on your behalf, provide financing sources, structure the deal, and more. Beyond just cost savings, these benefits often equate to a higher return-on-investment (ROI).
“A selling agent has no incentive to find the best property for a buyer’s goals; he or she is working to sell whatever they can. Westwood Net Lease Advisors is rare in that we primarily represent buyers. We work hard to find the best investment for your lifestyle and goals and guide you through the entire process with ease, from the property search to closing.” − Jason Simon, Vice President, Westwood Net Lease Advisors
Accurate Cap Rates
Let’s talk capitalization or “cap” rates. The cap rate is the ratio of net operating income (NOI) divided by the cost or value of the real estate. It is the return on your investment on an annual basis and is often misunderstood.
Your advisor should know the nationwide NNN lease market and research each property to determine the proper cap rate and value. Some of the factors for assessing valuation include lease term, credit of the tenant, lease type (NNN vs. NN), location, etc. Once again, a specialist you can trust who understands your goals and the finer points of the NNN industry and cap rate calculations can save you time, money, and hassle on such an important investment.
How NNN Investments Can Diversify Your Portfolio
Properly chosen NNN property investments are tangible assets that preserve cash flow and yield a reliable, passive income for 10-20 years with little or no owner responsibility. Stabilized income, tax benefits, plus the security of owning a physical asset and the lease guarantee bolstering the asset, are all great reasons to invest.
Depending on your budget and financing options, it may be worthwhile to diversify your investment portfolio with one or more of these properties for security, growth, strong ROI, and long-term predictability. Not only can you diversify your total portfolio with NNN lease investments, but you can also diversify within the net-lease market. With your advisor, you can determine what is best for you and your financial future, whether it is one triple-net investment or a portfolio of triple nets.
Efficiency & Triple-Net Market Conditions
Triple-net lease market conditions change rapidly; opportunities are here and gone quickly. Trying to find the right NNN investment, calling the seller of each property you’re interested in, and attempting to negotiate on your own is not efficient, not standard in the industry, nor in your best financial interest. There are many parts of the commercial real estate industry that are held in confidence; information is not easily obtained, unlike in the residential real estate market.
One such bit of information is that many properties are never listed on the open market. These properties, new builds, and developers prospecting for buyers may garner you more leverage. Emerging trends are also rarely publicized. As an investor, when you partner with an advisor who knows the market, it could be the difference between being in a position to purchase your desired property or losing out to other investors.
Which leads to the art of negotiation. This important skill is honed over years of transactions. It can be stressful, time-consuming, and lead to losing the NNN property of your dreams if not done with a firm hand and finesse. Westwood Net Lease Advisors utilize their relationships and decades of experience to handle negotiations for you and act as a buffer between you and the seller to get the best deal for you.
Disclosures, Privacy, Loyalty
A buyer’s advisor can obtain all the necessary information you need to make informed decisions. This could be the owner’s motivations and important property information that the listing agent may not want to disclose. On the flip side, your representative is loyal to you and your best interests.
Experience & Specialization
When it comes to selecting the optimal way to invest your money, you need specialized advisors, not salespeople. Triple-net lease investing can be complex – nothing can substitute for years of hands-on experience and market relationships. A knowledgeable, caring advisor is priceless when it comes to structuring the deal.
From the property search and letter of intent to evaluations and risk-tolerance assessments, tenant financials and credit ratings, financial and tax considerations, like-kind §1031 exchanges and cost segregation, legal expertise, negotiating the lease, inspections, and more, you need a representative like Westwood Net Lease Advisors in your corner.
To Wrap it Up – What Sales Agents & Brokers Won’t Tell You
The biggest thing to avoid with NNN lease properties is trying to buy a property yourself, without a buyer’s advisor. Using a listing agent on a property to help buy the same property puts you at a real disadvantage. Their loyalties lie in getting the seller the highest price for their property. There are countless other financial, time-saving, and stress-relieving reasons to engage a dedicated buyer’s advisor when investing in NNN lease properties. But, most importantly, it’s about getting you the best investment possible.
Westwood Net Lease Advisors offer decades of knowledge, nationwide market relationships, and triple-net lease, §1031 exchange, and cost segregation expertise. We provide objective advice, education, knowledge, and advocacy – all without any cost to you! Our goal is to help you acquire the right NNN investment with ease. Contact us today for a free consultation, 314-997-5227.
