Financing NNN properties for sale usually involves either a federally insured bank or credit union, or a private lender. The best loan options usually come from federally insured institutions, which will offer the most competitive rates and the most favorable terms. NNN loans are secured by properties occupied by one single tenant with an investment grade credit rating such as Walgreen’s or CVS, or non-credit tenants with acceptable financial statements. Properties with national tenant NNN leases are easier to finance than local shopping centers. Many lenders love lending on single tenant properties such as CVS, Walgreens, Dollar General, Family Dollar and Dollar Tree. Investors looking to invest in retail can get much better rates and terms on these deals than on other retail properties.
NNN triple net lease property investors can expect to see interest rates as low as 3% and terms like the following:
• Single tenant loans up to 75% LTV
• No upfront application or processing fees
• Simplified application process
• Terms and amortizations up to 30 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
• Low stepdown prepayment penalties
• Non-recourse and partial-recourse options available
• Fixed rate loans up to existing lease term
Private lenders are almost always more expensive. If, however, the NNN net lease investor is facing a time crunch or are looking for a temporary loan financing solution, a private bridge loan can provide the time to negotiate a long-term lease whilst seeking better financing options from crowd-sourcing, credit union, hedge fund or an insurance company.
Buying a net lease triple net NNN real estate investment property has specific financial requirements. The investor has to have a minimum accredited net worth of $1 million. This excludes up to $200,000 in income or $300,000 if the investor is joint filing, or excluding the value of the investor’s primary residence.
Current economic times, can be challenging for the small, private, net lease investor to take advantage of financing solid triple net lease investment properties. However, there are more creative channels open to such smaller investors, such as REITs, which may open their pocketbooks towards financing their own NNN triple net properties ready for exit.
Regardless of which financier a triple net lease investor chooses, the major factor will be as much tied to the credit rating of the tenant(s) as it will be to the investor’s own credit rating. The better the NNN net lease property tenant’s credit rating is, the better will be the investor’s lease terms and interest rate. This is because the lender is aware that the investor is depending on the tenant’s rent and fees to pay debt service. If the tenant has poor credit that makes the sale a bad risk for the lender, so finding investment properties with solid NNN tenants is crucial.
No matter what stage of the NNN investment process you are in, call on your reliable, and trusted experts at the Triple Net Investment Group. Robert Gamzeh, and his team of NNN advisors have a stellar record in finding solutions, and identifying value or lack thereof in complex transactions over many decades of market cycles.
