All Forum Posts by: John McKee

I would invest in NNN properties. This is all I do. In fact if I were to see a financial advisor he would say I have too much in real estate. Can you imagine having a 401k worth 1 million vs a 1 million real estate asses that pays you forever. I choose the forever asset! Do NOT pay the taxes and find an asset that will take care of you and your generations to come!

I get a call once on a month about renting space for a marijuana use.  It's gifting like hot cakes here in D.C.!  At first I was hesitant, but as long as it was legal I didn't care.  We have about a 20% retail vacancy rate in the city so I had to keep an open mind about this kind of tenant.  Just make sure you get the certificate of Occupancy from the city.  That's the approval stamp you need for this kind of business.  As far as resale value I have no idea, but I can tell you these places are raking it in and will have no problem paying the rent.  You should get someone in there that knows what their doing or has a few locations of experience.  It's kind of the wild wild west and some of these tenants don't know the laws but each city has it's own unique set of rules, grams, age requirement, and how the transaction is handled.   

Currently this building is occupied by 6 tenants (one empty).  One is well known, but the tenant says it's their worst performing store.  The site is at a light and is on a corner and the traffic counts seem decent at about 31,000 cars a day.  Negatives are it's a small town (but not dying), the site is totally dependent on car traffic, it doesn't look like the site is drive through friendly for future use, and the site is not in the heart of town but 3 miles from it.   Thoughts?? 

I usually don't ask for permission.  It takes too long and if the landlord says no then that is a redflag anyway.  I'm usually just upfront with them.  Usually it's common knowledge that the building is for sale.  Sometimes the tenant knows sometimes not.  At the very least you can put it in the contract that you are allowed to interview the tenant as part of your due diligence. 

There is no other way to get less than 20%
down through the banks. 

I own some of these class A NNN deals. The lowest risks deals are a ground lease with a well known tenant in a high traffic area. In other words you only own the dirt on a ground lease deal. The tenant owns and takes care of the building and all NNN expenses. Not all my deals are like this but I just wanted to point it out. My strategy has always been about controlling the asset and having passive income. The downside is that the cap rates are very low in today's market depending on the deal. I usually finance these deals so that I don't bury all my cash in the property. I have it cash flow just enough to please the bank. The strategy is to hold for a long time. I may trade up after 10 years if I find the right opportunity but also happy to hold. My first deal was a 1031 where I sold a residential rental property and used the funds for a bigger commercial deal. Why did I do it at the time?......Because over a 9 year period my rental property tripled in value for no reason (last housing boom that ended in 2008). I've never seen that kind of money in my life, not even in my 401K. I got scared and parked it in a class A asset. There is always risk. During the recession of 2009 I had to give 2 tenants a discount on rent for a short time. I did the same during Covid. One of them went out of business before Covid only because they were poorly run. In retrospect it wasn't a big deal because we had a Class A location so it was easy to lease back up. It appears we are in another boom of sorts now so if you made a lot of money through natural appreciation it may be a good time to trade up or at least leverage/refi to to keep growing your business. Hopefully this gives you some perspective and feel free to PM Me. Good Luck!

It sounds like you answered your own question. If you truly want to scale BIG and act like a CEO instead of COO then you will need to hire someone. It just depends on how you value your time and how big you want to get. If your stuck in the hamster wheel you at least need to try something different to achieve your goal.

I would say because it's not a "common element" and only unique for that owner that he should pay for it.  You could do it for him

as it is structural in nature and will belong to you if the tenant leaves, but bill him a special assessment for the repair. 

I think 3.5% is just fine especially since it's NNN. I rarely see anything above 3% a year so your already ahead of the game. The tenant is already going to get hammered with increased insurance, maintenance, and taxes so be careful with getting too greedy on the bumps.

NNN properties are real estate investments where you buy the property that already has a tenant in place. That tenant will pay you NNN (which is taxes, maintenance, and insurance costs). This is an addition to the rents.

P.S. where do you cash out your gains of stablecoins?