Acquire Fee Simple NNN with no skin in the game?

Question

It was suggested to me by a commercial broker that it ould be possible to structure a no money down deal on aa NNN using a fee simple property for sale but he didnt explain how. Could it be possible to acquire a NNN with no skin in the game using a fee simple structure? No down payment, no upfront costs? I am refering to many of the fee simple NNNs for sale on Loopnet. I am in Michigan.If any brokers are reading this feel free to advise. Thank you

Joel Owens · Answer

I would say on premium triple net properties it is doubtful.Too many other players ready to put skin in the game.

They don't have to deal with tenants,toilets,and termites and get a 6 to 8 percent annual return.

You might be able to structure something with a non-corporate tenant but that carries a bunch of more risk.

You can get into these properties with less skin as lenders that do credit tenant loans will go 90% LTV.So you could in theory structure these no money down but again there are big companies gobbling up triple net with hoards of cash.

If you are assuming a loan the lenders feel much more comfortable with a big corp with tons of backing,cash,and a track record for performing.The other benefit is that with the big company as the buyer the lender will let the personal guarantee go on the loan assumption.

If you are just Joe Blow wanting to assume it they might let you with a personal guarantee still attached to the seller.

This has just been my experience and there are always exceptions to the rule.

Jeffrey K. · Answer

I am just buying my first real commercial buildings and am interested in learning more.  I hope someone answers this questions and that we get more comments on the commercial side.