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3 Tips for Financing and Purchasing Your Triple Net Property For Sale

Are you considering the purchase of a triple net property for sale? If so, then you are probably researching ways to finance the purchase of that property. There are many ways to pay for the property, although most lenders will require the investor to meet certain requirements with regards to income and net worth.

A Little About Triple Net Properties

Triple net (NNN) properties generally provide individuals with a low-risk, high-return investment. Additionally, this type of investment is primarily hands-off as far as one’s role in the upkeep of the property. Outside of the building’s structure (i.e., roof, electrical, etc.), the mortgage and maintenance needs of the building are left in the hands of the tenant.

This alone makes finding the right tenant an important factor in choosing your property. Typically, when NNN properties are listed for sale, this means the tenant’s lease has run out. Furthermore, it is likely that they are vacating the property. However, there are other reasons an investor might choose to sell.

Chain businesses are commonly the best type of NNN investment because they are more reliable on returns and steady revenue. However, small business properties have benefits as well. The property you choose may very well depend on the current tenant. Furthermore, you will want to investigate whether they are a reliable source of income.

One of the best characteristics of a triple net property is that most will come with a lease term of ten to twenty years. This means that you have a greater chance of receiving a substantial return on your investment. For assistance finding the right property, consider hiring a triple net property advisor!

3 Tips for Financing and Purchasing Your Triple Net Property For Sale

#1: Save For a Down Payment

Choosing to finance a triple net property can be a confusing process. Saving for a down payment is a great place to start. Most lending companies will require a minimum of 30-40% down payment. You must be able to prove to the lender that your income and net worth are not depleted by that down payment.

In other words, don’t plan on ‘scraping together your down payment. Instead, save over time, perhaps even hiring a financial advisor. Prior to approving a loan, your lender will run a credit score check and take a look at your bank statements or financial records. 

#2: Apply for a Loan

When you begin the loan process, collect all the paperwork you will need ahead of time. This includes tenant financial documents, lease agreements, and terms of the investment. If you are investing with a partner or group, have all of the documents organized.

First and foremost, the lender will want proof that your tenant is a stable source of income and that the mortgage and bills will be paid back on time. As a result, it is in your best interest to select a tenant that does not have a history of breaking leases.

#3: Hire a Triple Net Advisor

Hiring a triple net advisor is a great step in making your commercial property investment. If this is your first real estate purchase, then an advisor will be able to help you navigate the choosing and purchasing of your property.

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