They have completed construction and 90% of the units are leased up.

Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”Key metrics for each Property Class:Class A Properties:Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.Tenant Default: 0-5% probability of eviction or early lease termination.Section 8: Class A rents are too high and won’t be approved.Vacancies: 5-10%, depending on market conditions.Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.Tenant Default: 5-10% probability of eviction or early lease termination.Vacancies: 10-15%, depending on market conditions.Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years.

Also, insurance companies can deny claims for certain situations, so it’s not bulletproof.Many people in your shoes run the rentals in an LLC for liability purposes but keep their primary home out of it, and they make sure their LLC has its own bank account, lease agreements, and insurance.

And no- buying NNN leased properties does not mean you have a bullet proof business plan that won’t be subject to adversity. 

Harry Helmsley’s deal to acquire the Empire State Building by separating it into (1) land (2) operating lease (3) building ownerships was less complicated.  

Higher, higher, lower, higher, higher, that's it, you win the lease renewal!!!!

Tenant Default: 0-5% probability of eviction or early lease termination.Section 8: Class A rents are too high and won’t be approved.Vacancies: 5-10%, depending on market conditions.Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.Tenant Default: 5-10% probability of eviction or early lease termination.Vacancies: 10-15%, depending on market conditions.Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years.

After a 3 month stay, our residents haven't been upset (or suprised...it was in the lease, after all) that a $250-450 dollar cleaning was needed to get a unit ready for the next resident.

It's a 3 unit that would be 100% leased up by end of August and would be well over 1.25 dscr.

Some banks will use an appraisal value (which are notoriously inaccurate), others want the place to be leased, others want it to be leased for a year.