STNL (Single Tenant Net Leases) - Are They Difficult To Obtain and Find Tenants For?
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[{"id": "fbroqdy", "text": "because the second your single tenant has problems so do you.  all your eggs in one basket. not my cup of tea", "replies": [{"id": "fbs2v6q", "text": "uhh, every time your tenant has problems, you have problems too, no matter the asset class", "replies": [{"id": "fbsg9fr", "text": "He's talking about this type of investment, vs a multi tenant one...say a strip mall.  I.e. one tenant having issues may only be 20% of a problem instead of shit hitting the fan.", "replies": [{"id": "fbsmw0y", "text": "Ah he's talking about credit risk then. I guess he should have said if they have an issue paying then you have a big problem on your hands or something to that effect imo.", "replies": [{"id": "fbszgdr", "text": "what I'm saying is you're relying on one income. not a smart play for novice investor.  I started out like that, relying on very few tenants for income. luckily I was 25 and had the energy.  today forget it.  you live and learn.   just here trying to spread some experienced advice.  can't beat that", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fbrulb9", "text": "You need to look at how much the tenant is paying in rent. Look at what the same tenant is paying in nearby locations. If the rent they are paying is above market, it is a less desirable deal. You want to be sure you can replace the tenant easily with the same rent. \n\nAlso good locations are critical. If you buy a busy corner property you can rest assured that you will always have interest in that location. Recently I\u2019ve been seeing NNN leases with kick out clauses meaning the tenant can leave if they give you notice. Obviously undesirable, but you must think the landlord was desperate to get that tenant in their building and paying rent.", "replies": [], "depth": 1}, {"id": "fbrvj7j", "text": "If the tenant leaves, you typically have a lot of work to get the property ready for the next tenant, and it can be vacant for a long time.  These realities are priced in, but it is a downside to keep in mind.  \n\nThese properties have pretty low returns because they are about as safe as it gets - like the treasury bonds of the RE world. As a buyer, you\u2019re usually competing with people a lot bigger than you (I assume, since you\u2019re asking on Reddit).  You\u2019re not usually going to get one with 20% down.", "replies": [{"id": "fbsmh5e", "text": "wait you cant get one with 20% down? then how do you get one", "replies": [{"id": "fbsmsm7", "text": "More money.  \n\nIt\u2019s not that you can\u2019t, it\u2019s just that you\u2019re gonna be competing with other buyers who may be coming in with stronger financials, and that does factor in much more heavily.  You can always do a cash out refi later on.", "replies": [], "depth": 3}, {"id": "fbukugx", "text": "Typically it at least 25-40% down", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fbry5p8", "text": "You can buy them super easily as they are commonly traded. You are buying an income stream. The rate of return is often lower than more labor intensive types of real estate, so if there is a catch, that is one. Also you can lose your tenant at the end of the term and then your property may be worth far far less if you can't replace them or can only replace them at a lower rate.", "replies": [], "depth": 1}, {"id": "fbs4t5o", "text": "2nd worst Real Estate investment right behind STNL sale/leasebacks.  Whichever the case, buyer's are always over paying price per square foot for supposed great numbers.  Risky because you're over exposed relying on one tenant who could go BK and you're stuck with an over priced property no tenant would ever pay on a superficial leased rate.", "replies": [], "depth": 1}, {"id": "fbsu1g1", "text": "I love them. You have to look at hundreds, if not thousands, to find legitimate deals. When you find one, pounce!", "replies": [{"id": "fbt7dz5", "text": "but look where? does loopnet even have them? and is it even possible to get financing for them", "replies": [{"id": "fbt7m8h", "text": "LoopNet, CREXi... brokers... and yes. Absolutely", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]