All Forum Posts by: John McKee

If you are buying a NN that means you need to watch out for the missing N ! Read the lease carefully to see what costs are NOT covered. For example maybe you need to be responsible for the roof expense. Find out the age of the roof and what it might cost to replace it. This will factor in your calculation of IRR. A lot of brokers list their properties as passive investments with all expenses covered, but the details are in the lease!

pay the taxes and roll it into debt funds or mortgage note funds with no speculative IRR returns or capital calls. You can earn 9-14% depending on the deal and have shorter lock up periods! I would invest in about 5 different funds and sit back and relax. Everyone is afraid of paying the tax, but when you are earning 9-14%, your capital gain will be offset quickly and you never have to worry about another 1031 exchange in your life. Your heirs will not get the step up in basis but they will thank you for an asset that has no management hassels, arguments on how to dispose of this property, or future 1031 worries! Most importantly this will be the most passive type of investment which is what you are looking for.

NNN investing is not what it used to be. Trust me I know! Low returns, higher turnover than past decades, higher banking costs and capital improvement costs.

I would agree on your assessment.  The money is in value add.  Why would anyone buy real estate at a 5.5 cap is beyond me unless they can boost the value.  Odds are that the value has already been squeezed out of the deal, but maybe you come across a passive landlord that hasn't improved a property or raised the rents in years because he was comfortable.   

If you have under 25K to invest I think it's a good platform.  I like that your money is only tied up 6-24 months depending on the deal earning. 7-9%.  Beats having your money in a CD

When it comes to residential, the biggest surprise is how tenants beat up the property without a care in the world.  Upfront communication is the key....I.E. don't tell me about the leak a week later...Tell me asap.  

Can anyone recommend companies that they are invested in personally. These are passive investments where you are investing in SEC registered funds (aka other peoples deals). I would love to hear your experiences. What kind of real estate fund, IRR, hold period,preferred return and why you chose this particular company?

Sell and Pay the tax! Earning 5% in a DST might be passive, but you will have to do another 1031 down the road when, pay broker fees, pay an intermediary, and your money is tied up a long time. Roll the funds into a mortgage note fund paying 12%-14% with no capital calls, and you will recoup the capital gains tax in no time. Tons of private equity options out there paying high returns.

What do you guys look for in a debt fund?  Any recommendations?

@Dan Hawtree please elaborate on your specific expereience.

Please PM me your specific suggestions of companies,funds etc. so I can continue to do some due dilligence.  Personally I have performing note funds ranging from 9-12% annual returns.  Looking into Industrial real estate funds, however I am not a fan of capital calls.