is it recommended to purchase NNN commercial out of state ?
NNN below 1.5mil are hard to come by in my area

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is it advisable to purchase NNN outside of my state ?

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How does one deal with  commercial building maintenance and repair when you are out of state ?
[{"id": "g4qbqsu", "text": "If its triple net you shouldn't have to deal with repairs &amp; maintenance.\n\n*edit an apostrophe", "replies": [{"id": "g4qh8hn", "text": "Do you mean you wouldn\u2019t deal with maintenance?", "replies": [], "depth": 2}, {"id": "g4qs84z", "text": "I realized not all NNN are the same\n\n&amp;#x200B;\n\nI have been told some NNN will leave building structures like roofing to owner's expense\n\nbut everything else is tenants", "replies": [{"id": "g4qup1k", "text": "I have found this graph helpful \n\nhttps://images.app.goo.gl/5JPxA7JAmS9UNaBV8", "replies": [{"id": "g59p9t5", "text": "I\u2019m sorry, but I\u2019m super new to this so having a hard time reading the graph. What does the Y-axis percentage mean? What is it a 100% of?\n\nFor example, say in some Rent Roll Report it says lease for tenant X is $5,000/mo and X is NNN. Does that mean only $2,000/mo of it goes into my pocket while the rest gets used to pay for taxes/insurance/maintenanceRepair? I would think the entire $5k goes into my pocket, and X\u2019s contribution to taxes/etc are just not shown, right?\n\nAlso, what is CAM? \ud83d\ude2c", "replies": [{"id": "g5erp18", "text": "It's supposed to illustrate how landlord is making their money and who carries the risk of increasing expenses. A gross lease will have the highest contract rent going to the landlord, who then pays expenses out of pocket. A NNN lease will achieve lower rents but then you don't have to pay expenses. In theory, the landlord is making the same amount of money either way.\n\nGenerally NNN or absolute net leases are preferred by landlords, especially on longer leases, because if for example utility bills skyrocket over the next 5 years it won't decrease your NOI (but the tenant won't be too happy).\n\nCAM is common area maintenance. Tenants can be on the hook to pay a proportional share of maintenance for lobbies, parking lots, and other space in the property that is shared with other tenants.", "replies": [{"id": "g5h8yoo", "text": "Gotcha! I thought the payments from NNN were called CAM, but really CAM payments is just a portion of NNN, as depicted in the picture.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "g4u1a5x", "text": "That\u2019s \u201cabsolute NNN.\u201d Typically, NNN LLs can pass thru any property-level expenses except capital expenditures to the tenant.", "replies": [{"id": "g4ubvuh", "text": "MSNwong is correct. If you don\u2019t want to do any maintenance look for either a ground least or an Absolute NNN", "replies": [], "depth": 4}, {"id": "g6h78yp", "text": "I\u2019ve also heard of instances where the tenant will reimburse the owner for a proportion of property tax, vs paying outright.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "g4sf67c", "text": "NNN does not equal absolute net. The difference matters.", "replies": [{"id": "g4tp5ls", "text": "NNN is now a marketing term.", "replies": [{"id": "g4tpwfx", "text": "That's retarded, but TIL", "replies": [{"id": "g4ub0sj", "text": "It\u2019s ridiculous but it has become somewhat common for brokers to call what is really a double net \u201cNNN\u201d for marketing reasons", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4qig0v", "text": "I have helped a borrower a few times recently purchase buildings out of state, Colorado.  If it really is NNN lease, the tenant should take care of all repairs and maintenance.  I have seen that the owner is responsible for structure and roof.  That is one of those you can handle however you would like; either a reserve account and hold until necessary or however you are comfortable with.", "replies": [{"id": "g4s7oww", "text": "The latter is commonly referred to as NN, or double net", "replies": [], "depth": 2}], "depth": 1}, {"id": "g4qik2z", "text": "Yes, the whole point of NNN deals is that the tenant is responsible for the property. If the lease is structured where the landlord is required for certain R&amp;M you could hire a local property management company for a small fee. In the current market lenders will not be as apt to lend to investors who are not invested in the market already. I do know a few lenders who specialize in national NNN lending who are closing loans now.", "replies": [], "depth": 1}, {"id": "g4qj06o", "text": "Well, the idea of a NNN property is that it requires minimal management and maintenance from the landlord, also law changes frequently from state to state and not all NNN are really 100% landlord maintenance free. Ideal states are Florida and Texas for NNN, since they have no state tax, which is something less you would need to take care if you were to buy a property there. Also, you need to check if the contract gives you the responsibility of the structure and/or the roof. If so, I would get a reasonable quote on the roof, have an inspection and then have a reserve for when the roof is due to be replace.", "replies": [], "depth": 1}, {"id": "g4qqz43", "text": "Yes NNN are traded on a national level. \n\nAs someone mentioned, TX and FL (and a few other states like South Dakota) don\u2019t have income tax, but I\u2019ve found cap rates to be lower in those states which basically evens it all out.", "replies": [], "depth": 1}, {"id": "g4qten8", "text": "Thoroughly read the lease and understand what the LL obligations are. In theory, NNN properties should be low expense and low maintenance. You will find that many multinational companies sneak language into the lease that shifts more responsibility to the LL under certain circumstances. \n\nIs the property in a shopping center? If so, understand the CAM\u2019s. A catch that came up in a deal that I financed recently was that the tenant CAM responsibility cannot increase more than X% per year. All that needs to happen is one year of very low CAMs for the LL to be stuck with low and gradually increasing reimbursements.", "replies": [{"id": "g4slqtp", "text": "If you\u2019re a LL, and you can\u2019t keep a CAM cap out of a lease, insist the cap be cumulative and compound annually, so you don\u2019t get stuck with the situation in the post above.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g4rwg23", "text": "You guys have no idea what you\u2019re talking about lol", "replies": [], "depth": 1}, {"id": "g4thjs3", "text": "1. Although talked about and marketed as such, the terms NNN (aka triple net), net lease, or even absolute net are not universally defined nor have any legal significance. In other words, use these as a suggestion and read the lease as it dictates landlord and tenant responsibilities, and they can vary greatly based on the deal. \n2. If the tenant become insolvent or the space otherwise goes dark all expenses normally revert to the landlord\n3. Don't confuse property taxes with state income taxes. CPA's should weigh in here but I believe you'll pay income taxes in your state regardless of where the property is located.\n4. Always determine the possible impact of the property tax increasing based on the new purchase price, and how much of this amount can be passed through to the tenant.", "replies": [{"id": "g4vxlih", "text": "State sales tax is always paid by T (in my experience anyways) but yea you would be responsible for your own income tax", "replies": [], "depth": 2}], "depth": 1}, {"id": "g51pf4w", "text": "NNN is great asset to purchase out of state. Depending on what you invest in specifically, it\u2019s a very low maintenance opportunity with a lease structure that allows your tenant to make all of those common upkeep issue. Also, depending on where you live, you often times can find better yields for the same asset in different tiers of markets.", "replies": [], "depth": 1}, {"id": "g53cv0j", "text": "So you just want to buy in cheap markets because you are cheap or don't have the money?", "replies": [{"id": "g5cbz86", "text": "No, a lot of people buy in other markets because returns are better or for tax purposes.", "replies": [{"id": "g5edy2m", "text": "But a cap rate doesn't measure \"returns\"!  It measures cheap crappy markets!", "replies": [{"id": "g5en9es", "text": "Not necessarily. It can mean a shorter lease in a great area, a franchisee instead of a corporate guarantee, or a taxable state instead of a tax free state. It can be a variety of things.", "replies": [{"id": "g5enqbj", "text": "Yeah, I'm thinking you don't know what you are talking about.  Cap rates are a market metric.  The things you listed are property specific that have nothing to do with cap rates.", "replies": [{"id": "g5eunkj", "text": "Alright Bob.", "replies": [{"id": "g5fqrxf", "text": "Good, it is about education.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g54ffoo", "text": "Just make sure you understand specific laws in the other state.  Just for example, some states require rental tax even on real property and others dont (fl vs al).  Some states require filing a tax composite even if you are an out of state resident (al) others allow full pass through.  Important to know little nuisance that could cost you additional dollars", "replies": [], "depth": 1}, {"id": "g5az048", "text": "Hire a lawyer to read the lease. Don\u2019t rely on any broker rep telling you it\u2019s NnN or absolute etc. tell me what state and I can refer an attorney!", "replies": [], "depth": 1}]