You have probably heard of commercial real estate investors who make investments without the assistance of property brokers. In fact, there are even educational packets you can order—usually by dialing a number on the TV screen during a 30-minute infomercial—that promise to supply you with “everything you need” to become a successful commercial real estate investor.
Handling triple net real estate investments on one’s own is attractive for two reasons: you can avoid paying a broker’s fee, and it’s personally satisfying to understand the business of how to make triple net real estate investments. However, there is a major difference between simply executing your own transactions and acquiring the best triple net properties on the best terms.
WHY YOU SHOULD HIRE A BROKER
While using a broker involves paying a broker’s fee, the expense is negligible compared to the income a good triple net property generates over several years. The goal of the investment process is to find the most lucrative property for your investment needs and acquire it with the least amount of risk and exposure. Professional brokers help you achieve these goals in at least four ways.
USING PROPRIETARY PROPERTY DATABASES
Brokerage firms have access to proprietary databases that list thousands of on-market and off-market properties. While could you find out about on-market properties by checking property listings, learning about unlisted properties would prove almost impossible. When looking for triple net real estate, the key is to cast the net as wide as possible to give yourself the greatest amount of options.
LEVERAGING INDUSTRY CONNECTIONS
Professional property brokers typically have professional relationships with other brokers, which they leverage to help clients find properties. In some situations, an investor gains access to an excellent property simply because his broker made a phone call to another broker who had a client that wanted to relinquish the property. Again, using a broker increases your access to triple net properties.
PERFORMING FINANCIAL ANALYSIS
Great triple net properties aren’t purchased on a hunch! Brokers analyze the financial aspect of a property in depth before recommending a purchase. In some cases, a property that seems like a sure hit turns out to be a miss once the tenant’s financial picture comes into view. Unless you specialize in valuating triple net property, it is crucial to receive advice from someone who does.
FACILITATING A TAX-FREE TRANSACTION
In many cases, an investor can trade properties with another investor to acquire the real estate he wants, executing a 1031 transaction that eliminates the capital gains tax. However, choosing the right 1031 transaction can be complicated. There are several types of 1031 exchanges, and selecting the right structure for the exchange should be done with the help of an experience broker.
CALL WESTWOOD NET LEASE ADVISORS
Making your own investments may seem attractive, but most triple net property purchases are best made with the help of an experienced broker, one that has access to a proprietary property database, can leverage industry connections, performs financial analysis, and advises you on 1031 exchanges. At Westwood Net Lease Advisors, we provide each of our clients with this level of service.
