Louisville, KY · Member since 2013 · 15 posts · 4 votes
I'm about to acquire my first commercial property and at the same time acquire a new commercial tenant. I'm structuring it as an Absolute NNN Lease where the tenant is responsible for repairs, insurance, and taxes for a significantly reduced rent. What do I have to give the tenant so that they can pay the insurance and taxes on time? Do they have to go through me where they reimburse me for payments? Or do they pay both directly?
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
5y
Directly to the billing place along with their rent.
You want to make sure that each 3rd party that they're paying shows you as an "interested" (name varies) party. That means, that if they miss a pmt you get a call/notified right away.
NNN deals are nice, but you don't want a tenant putting you in default and then finding out a ways down the road if he doesn't pay.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
5y
Directly to the billing place along with their rent.
You want to make sure that each 3rd party that they're paying shows you as an "interested" (name varies) party. That means, that if they miss a pmt you get a call/notified right away.
NNN deals are nice, but you don't want a tenant putting you in default and then finding out a ways down the road if he doesn't pay.
Full time investor · Cincinnati, OH · Member since 2013 · 405 posts · 312 votes
5y
I would have them pay you. Estimate what all the NNN costs are for the year and include that in the rent. You pay the taxes, insurance etc. At the end of the year, you reconcile the NNN taxes. Is this a national, regional or mom and pop tenant?
I would have them pay you. Estimate what all the NNN costs are for the year and include that in the rent. You pay the taxes, insurance etc. At the end of the year, you reconcile the NNN taxes. Is this a national, regional or mom and pop tenant?
Yeah, that'd be the other option if I owned NNN. I forgot.