Wednesday, September 5, 2018

Passive, Net Leased, Freestanding Real Estate Investment Income UPDATE!

With the recent news of Actors/Entertainers working day jobs, I think this should bring into focus just how volatile your work income could be.

Actors/Entertainers will work on a single project for maybe a few days to a few months.  If they are lucky enough to work on a popular TV Show or in a Hit Film, or even if they sing/write a hit song, they will have a steady flow of residual income for a particular period of time post the end of that project.

However, most end up working a "Regular Job" to make ends meet.

And, there is nothing wrong with that!

However, what is wrong is the lack of investing in income sustaining investments -- whether stocks, bonds or in my expertise, Commercial Real Estate (CRE).

The wife recently made me realize that in the blog readers everyday life, if you are NOT experienced in Real Estate, when someone like me comes along and I refer to Real Estate investing in terms such as: "Passive" or "NNN" or "Net Leased Property," you might conjure up an image of troublesome tenants who you will have to hunt down to collect your monthly rents.

Then again, I am NOT trying to point you in the direction of becoming heavily involved in property management.  My intention is to help you -- if you are a novice when it comes to real estate investing -- to become more educated and to better understand this lucrative world with as little anxiety for or against property management concerns as possible.

And, a "Triple Net" or "NNN" property is that type of venue for you.  These types of real estate investments are the most popular type of real estate ownership.  AND, even experienced real estate investors looking for a better than average Wall Street type of investment product, will acquire these types of property simply because of their better than normal Return On Investment (ROI).  Unfortunately, most normal people do NOT understand this because these properties are the last thing you would think about when you think about real estate.

Summerlin Area Map

So, you see, as an owner of a "Net Leased Property" that has a Credit Tenant under a "Triple Net Leased" property, you simple collect rent.  Your monthly or quarterly responsibility is to cash the Tenant's rent check.   (Well, with direct deposit, it is checking to see if it was deposited.)

Another advantage is that even without a mortgage loan secured by a Note and Trust Deed, you still gain an the equity of the property for the time you own the property.  And, the Tenant in a "Net Leased" Property is (usually) responsible to pay ALL of the expenses associated with the property.  That means, your property's Real Estate Taxes, Insurance and Common Area Maintenance (CAM) are paid by the Tenant.  AND, you will receive (in most NNN Leases) an annual increase in the Tenant's Monthly Rent.  So, as you can see, the longer the tenant stays either through their initial lease or through their options or extensions, their annual rent usually goes up and they will cover your property ownership cost as well.

Sure, in the last few years, we have seen a decrease in real estate values.  Monthly rents have decreased as well.  And, as Tenants have gone out of business and moved out, it was because Tenants could no longer afford the rent because their business has suffered dramatically from the collapse of the housing financing market.  But, the properties mostly hurt in the Commercial Real Estate (CRE) realm were Multi-Tenant properties, such as: Business Parks, Shopping Centers and Professional Offices.

So, for properties that are free of the property management hassle, a freestanding NNN passive, investment property is the way to go.  Thus, the current higher than normal demand for these properties has driven the acquisition price higher.  Thus, lowering the Cap Rates.  And, thus -- just like the rest of the US, Las Vegas Cap Rates for these properties is heading down -- which means acquiring a 9% Cap Rate property is far and few between.  In other words very, very few remain unsold.

So, be brave.  John Wayne made his fortune in Orange County Real Estate development.  Why do you think Orange County named their airport after him.  And, Wayne Rogers from the early M*A*S*H! fame, quit TV because Real Estate even back in the 1970's was making him more money than TV.

And those of you currently earning a majority of your income from TV Royalties, you will soon learn the fate that Alan Alda learned as M*A*S*H! grew old in syndication.  The show quickly lost appeal as the show grew older.  And, this makes the TV Show less valuable.  Thus, Alan Alda earned less and less as the show grew older.

And, even IF you want some of the rent income to go toward charity or just to pay your monthly household expenses, a steady income from a Net Leased property allows you that opportunity.

So, give me a call.  Let's discuss this further.  Once you have seen the light of a regular monthly income, you will NOT want to go back to business as usual.

To Contact David Howes try: davidATdavidhowesDOTnet OR; 7 0 2 5 01 9 3 8 8 AND Please #Follow David on Twitter: @DavidAHowes Have a nice day!

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