1. B U I L D I N G A L O N G T E R M R E A L E S TAT E
P O R T F O L I O
INVESTING IN TRIPLE
NET LEASED PROPERTIES

2. LONG & FOSTER REAL ESTATE, IN C
• 20396 Exchange Street, Ashburn, VA 20147
• 703-724-9494
• Dave Olson Carla Bates
• 571-236-2627 571-276-3406

3. WHAT IS A TRIPLE NET
(NNN) LEASED PROPERTY
• A fee simple single tenant real estate parcel consisting of
the ground and a structure with an existing lease to an
operating business.
• The landlord has no responsibility for the building.
• The tenant has all responsibility for maintaining the
structure and exterior, pay taxes, any other fees and all
insurance.
• Frequently it is a fast food business, bank, day care or
other stand alone business.

4. WHAT TO LOOK FOR IN
THE LEASE ITSELF
• A lease term of many years, frequently with options to
extend.
• The lease is normally signed by the operator.
• A guarantee by the business owner or another party if
the operator does not have ironclad credit.
• Escalations of the rent amount included in the lease -
common escalations are every 5 years.
• The credit worthiness of the lessee is paramount and is
a key element when evaluating the deal.

5. FINANCING
• Financing can be arranged – common LTV is 70%
although each deal is unique.
• Each lender will have states where they currently lend –
check with your lender to determine their footprint before
you start to look for an investment.
• Some sellers demand all cash.
• Needs to be lined up in advance.

6. LOCATION
• The property can be anywhere in the US.
• Work with your bank to determine what are the areas
where they will finance the deal.
• Because the tenant has complete responsibility the
investor does not need to be near the property and can
own at a distance – some investors retain an inspection
company to conduct an inspection periodically to ensure
that the property is being maintained.

7. OWNER FINANCIAL STRATEGY
• A NNN property is less risky than simple real estate
ownership.
• The income from rent the property is contractual.
• The costs related to a mortgage are also contractual.
• The strategy is long term.

8. INVESTMENT STRATEGY
• One strategy is to prepay the mortgage balance from
positive cash flow
• After paying the mortgage and providing cash to the
investors for their tax obligations, excess cash can be
used to provide a steady cash flow for family or estate
purposes.

9. OTHER STRATEGIES
• Another strategy involves the take-out.
• When the equity has reached a pre-determined point,
the property can be sold and the proceeds leveraged
into a more valuable property using a 1031 swap – this
defers capital gains tax and possibly avoids it altogether.
• By moving into a more expensive property, the investor
leverages the initial investment.

10. WHAT WE DO
• Find the property.
• Arrange for the attorney to write contracts and conduct
closing.
• Negotiate the deal.
• Ensure that all elements of the transaction go smoothly
and are worry free.
• Call us for references.

11. WHY SHOULD YOU CONSIDER
NNN INVESTMENTS
• The investment is stable and cash positive.
• The investment is predictable – because income and
expenses are determined for many years into the future,
short term fluctuations in the market do not affect you.
• It is a hands off way to build wealth.