is Double Net in structure and Landlord is only responsible for roof and structural repairs while the tenant reimburses the landlord for the taxes, insurance and common area maintenance charges. The lease was recently extended by Dollar General in early 2019 for an additional 10 years and Dollar General still retains 2, five year options.

@Richard Merkuris NN is where the tenant pays taxes and insurance. Building and grounds maintenance is on the landlord. That being said you need to examine the lease carefully to make sure you fully understand the terms.

@Greg Dickerson

Thanks for the info.

There asking $850,000

With a cap rate of 7.6 and they just sign earlier this year a another lease till 2029.

Is that a good cap for it

NN leases can mean ANYTHING. It's all about what is written in the lease. I have seen anything from roof only, to structure only, to both roof and structure, exterior mechanical systems, to parking lot, detention ponds and well systems, and even utility lines.

NN especially in cold belt states can be a lot of hassle having to maintain certain aspects of the property for a tenant.

Absolute NNN new build Dollar Generals typically range from 6.25 to 7.0 cap rates with 15 year primary term leases with flat rent until the option periods. There are some cases where cap rate is even lower if one of the few upgraded construction models that does NOT have the sheet metal sides and back and is in a strong suburban to urban core market. These new properties though can generally run in price from 1.4 million to 2.6 million.

Sounds like you have an older vintage Dollar General with a NN. If building is older having a NN can be worse as usually new builds those properties can sometimes come with a roof warranty and a building warranty that transfers to the new purchaser (buyer). Check on if there is a roof warranty and structure and if it passes onto the new buyer. If not during due diligence you should be getting a (PCR) property condition report outlining potential deficiencies and items of correction needed.

Look at location of Dollar General with traffic counts, sight lines, access, population growth levels, income levels, crime reports, school systems, economic development department plans for the area, etc.

If building is obsolete but rents are really low per sq ft and sitting on a nice piece of land then might have some upside in redevelopment in the future at higher rents. If it is weak suburban to rural and limited growth patterns over the last decade then value can be more limited to existing structure there and rent being paid by Dollar General.

If condition report shows roof is reaching it's useful life limits and parking lot is worn down then you would need to negotiate a credit from the seller that you can hold in a reserve account post closing. This way you pull from the reserve account instead of having to fix constant items that take away from your expected cash flow in having a NN lease versus an absolute NNN.

Dollar General is typically 30% or more down.

7.6 cap on whether that is a good cap rate is subjective. Investors all have different goals and cash flow desired. It's not just the cap rate unless you are paying all cash. The term of the lease and investment grade of tenant with price point can dictate lenders available and what interest rate and terms they would give which can affect cash flow projections. A property like you are describing unless location is amazing I have seen in the 8 plus cap rate range before on vintage DG's.

No legal advice given

Thank you for the information you've  given. Reading there property information I'm a little confused about still. I'm still new to this. 

Richard that is why you get a commercial buyers broker who specializes in NNN leases and retail property. The listing brokerages job is to move inventory for a seller whether that is a good, bad, or marginal property to purchase.

They tend to tell buyers whatever they can (accentuate the positive, don't mention the negatives) to give the least path of resistance and asking questions to a sale for their seller.