Should I use an agent for my first out of state NNN?

Question

I'm looking at a NNN in Grand Rapids, MI and am a licensed broker in CA. This is my first time dealing with a NNN and an out of state purchase. What are the advantages/disadvantages of using a broker on this deal?

Joel Owens · Answer

Having a partner complicates things. You want to be separate in structure so that when you sell down the road you can 1031 into other properties without the same partner attached. This can be accomplished with a TIC structure. The other partner having an IRA adds another layer for that person in putting the deal together.

NNN is hot. There are a lot of buyers for the product. If you ask for commission back with national assets look to go off their list immediately. There are just too many buyers wanting the properties. There are some buyers even willing to pay more commission to land the property on top of what the seller is paying.

That kind of stuff might work more with mom and pop type commercial.

Jean Bolger · Answer

If it were me, going into a new area (both business-wise and region-wise) then I would absolutely get a broker who specialized in that sort of deal, in that part of the country, to work with me. You don't know what you don't know. Do you really want to risk screwing up a 470k investment?

Joel Owens · Answer

If you are going to use a broker/agent for NNN use one that does it day in and day out.

A generalist broker/agent will bring you little value in the process. The seller on the listed property is paying commission to the listing broker who is doing a co-op with the buyers broker.

When I work with clients I first access their PFS statement for liquidity and net worth versus the property they want to buy.

Are you going for single NNN or multi NNN??

What amount are you putting down for price range??

I only work with serious buyers and sellers who are committed to the process. My time is worth a lot of money.

Hope it helps.