Exchanging assets: from multi-family into NNN

Many multi-family and other management-intensive investors eventually plan to 1031 exchange out of their multi-family properties and acquire net lease NNN assets that are more passive and less hands-on. Such investors typically spend decades intensively managing their properties and are literally burned-out from the process. It may also be that they would like to leave their heirs a hands-off portfolio. These investors can sell their multi-family assets and deal with a huge tax bill, or they can exchange into different multi-family assets, or even go to other asset classes. However, 1031 exchanging into triple net lease properties is the holy grail of investing for multi-family investors for reasons described below.

The foremost priority of most multi-family investors is to increase cash flow. Concurrently, stabilizing portfolio cash flow is also very important to them. Next in order is their desire to maintain and grow convenient, inter-generational wealth. Also, multi-family investors are keen to relinquish their apartment portfolios for NNN net lease investments so that they enjoy and successfully bequeath the assets they have built. Let’s examine all of this in detail:

 Stable and Predictable Income Cash Flow: One of the primary reasons for the growing popularity of the NNN net lease Properties is stable cash flow. The long-term lease agreements of NNN properties guarantee a lucrative, lower-risk cash flow to the landlord.  Therefore, investing in a single tenant property with a triple net lease seems an ideal investment choice for many landlords. They do not need to search for new tenants every single year as the length of NNN Lease ranges from 10 to 15 years.

 Increased cash flow: When you take into account the many tax advantages and incremental rent bumps of a decade long or more NNN net lease term, it is common that a 7.00% cap rate translates into a compound annual return of about 11%!

 Zero Landlord Responsibility: Another attractive benefit of investing in NNN Lease Properties is zero landlord responsibility within the lease time frame. A triple net lease puts the entire burden of the leased property on the shoulder of the tenant. As a result, landlords do not have to worry about or look after any property related issues after purchasing a triple net lease property.

 Little to No Maintenance Liability: In the case of triple net lease investments, the tenant manages and handles every ongoing operating cost of the leased property starting from property repairing, maintenance to taxes and insurance. Therefore, landlords do not have to deal with any repairing or maintenance issues and complaints. They simply passively enjoy the passive rental incomes coming from the triple net lease tenant.

 Convenient inter-generational wealth: Multi-family investors exchanging into NNN properties, can easily and effectively diversify by owning NNN assets in different states and locations with a mix of tenant types, asset classes, and lease durations. Diversification into triple net lease assets will maintain and grow convenient, hands-off investments for future generations who may not be interested in managing real estate portfolios.

Broker Robert Gamzeh at The Triple Net Investment Group can expertly guide you into exchanging your multi-family assets for net lease replacement properties that will grow your wealth with an immediate, stable, predictable, income stream with predetermined rent increases and the possibility of tax-advantaged cap rates. For years, Robert and his team have resourcefully guided 1031 exchange clients near retirement, into exciting, passive NNN assets. Meet us and get to know the world of difference we will make for your triple net lease NNN 1031 exchanges.

Call 202-361-3050 today and reach Robert directly
for a complimentary consultation.

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