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Another month, another selection of strategies, tools, lessons, and ways we can build together. This month:
- Sale-leasebacks (A creative way to get into commercial properties)
- Finding Commercial Deals Through Maturity Dates
- Understanding the Nets (N,NN, and NNN)
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Tools and Resources for Real Estate Investors
Growing your portfolio is tough. These will make it easier...
Can you buy a company's building and they'll stay? Yep. Sometimes you'll have a business that is in need of cash. In order to get cash, they'll sell their building, turn around and lease it back from the buyer. This is done because the business feels that they can use the cash more wisely than keeping it tied up in a building. If you're interested in getting into the commercial space, this could be a great way to do it. Highly recommend checking out this article by LoopNet - What is a Sale-Leaseback?
What if you knew when someone had a loan coming due? Would you change up your approach to the potential seller? (We hope so) With commercial properties, you can use tools like Crexi to see the maturity date, interest rate on the current loan, and the total loan amount. Not everyone can refinance and sometimes the turnaround of the property didn't go as planned. Knowing that, you can focus on properties that might be under distress in the near future, which means you're helping someone get out of a problem. (You might even find a company owner that likes the idea of a sale-leaseback)
Who is responsible for what in commercial? Net leases can make or break commercial deals. When exploring this space, you'll come around Single (N), Double (NN), or Triple (NNN) net. Don't let this confuse you. This helps everyone know what the tenant is responsible for. N covers one expense (usually taxes), NN (Double Net) covers taxes and insurance, and NNN (Triple Net) covers taxes, insurance, and maintenance/common area maintenance (CAM).
As always, if you're looking at a commercial or residential project and need short term funds as you stabilize/rehab it, let us know!
- The Okra Team
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Have a project that you’re needing funding for?
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