NNN Investing FAQs

The three nets are property taxes, insurance, and maintenance — in a triple-net lease the tenant pays all three on top of base rent. Your rent check is net of those expenses, which is why NNN yields are quoted like bond coupons. Variations matter: "NN" leaves roof and structure with the landlord, "absolute NNN" assigns literally everything to the tenant, and ground leases put even the building itself on the tenant's side of the ledger.

Net operating income divided by price. A property collecting $70,000 of net rent priced at $1,000,000 is a 7% cap. It's simultaneously your unlevered yield and the market's risk vote: stronger credit, longer term, and better real estate mean lower caps; every risk factor pushes the number up. Two identical buildings can deserve different caps because of one paragraph in the lease — which is why we read them before quoting comparisons.

Entry-level deals — seasoned dollar stores, small-format retail in secondary markets — start around $800K–1.2M, meaning roughly $300–500K down at typical 60–70% financing. The heart of the 1031 market runs $1.5–3M (QSR pads, newer dollar stores, drugstores), and corporate c-stores and trophy ground leases run $4M+. All-cash buyers compete best under $2M, where sellers prize certainty.

The honest answer: absolute-net deals come close — collect rent, file taxes, watch the option calendar. Standard NNN with landlord roof/structure means occasional capital events (a $60K roof every couple of decades). What's never passive is the buying: lease reading, tenant underwriting, and re-lease math determine whether the next 15 years are boring in the good way. Front-load the work, then enjoy the mailbox.

Corporate tenants rarely break leases (the rent obligation survives even a closed store); the real questions arrive at option dates. Your protection is bought on day one: a building that re-lets near current rent in a trade area with real demand. That's why we underwrite every deal as if the tenant were leaving — contract rent versus market rent, backfill demand, and basis per foot. If the vacancy math works, the lease is upside.

You can see maybe 70% of the market on portals — what you can't see is which listings are mispriced, what the last ten comparable deals actually closed at, which off-market deals are circulating, and what the lease's paragraph 14 does to your exit. Since the listing side pays buyer-broker fees whether or not you use one, unrepresented buyers pay full freight for less information. The service is free; the information edge isn't small.

Community and regional banks quote most sub-$5M deals — typically 60–70% loan-to-value, 5–7 year terms with 20–25 year amortization, rates tracking treasuries plus a spread that narrows for investment-grade tenants. Credit unions and life-company money compete on larger, longer paper. The balloon at year 5–7 (see our balloon loan calculator) is the structural feature to plan around, especially on leases whose remaining term will be short when the loan matures.

Five repeat offenders: buying the brand instead of the lease signature (franchisee ≠ corporate), trusting a flyer's "NNN" label without reading the maintenance article, paying premium caps for above-market rent that resets down at renewal, skipping the re-lease math because the term looked long, and starting a 1031 search after the 45-day clock began. Every one is avoidable with work done before the offer — which is precisely the work representation exists to do.