How would you spend 2mil cash on NNN commercial realestate to get the best deal in this market.

In Buying Property - Asked by GARY G. - Sep 11, 2010
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Answer(s)

Jamie M.
Owner/Investor
Newport Beach, CA

I would buy a $1.8M 87 unit mutil family with 95% occupancy and 19.4% net cap rat ($347K net per year). Hold for 2-3 years and flip it for a 12% net cap $3M.

Sep 12, 2010
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jackson c.
Tenant
Chandler, AZ

I would find a lease back property which leased to some franchise like: McDonald, Jack in the box, Panda express,....with 12% to 15% cap rate for about 1.5 mil or less, so I can use the income from that property to invest in other shopping center or multifamily apartments. By this way, I will be one of the big guy in the world.

Sep 12, 2010
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Frank F.
Broker/Agent
Watchung, NJ

I would buy tax liens and tax deeds.

Sep 12, 2010
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Boris A.
Broker/Agent
Houston, TX

Houston TX has the best deals and most stable economy in the country today. As we watch the news we know that the Republican party will win big so oil companies will benefit from that as we saw in the past. Houston is known as an oil city with the most oil companies that prosper here(Also we have the fourth largest medical center in the world). Office buildings,shopping centers,apartment complex's are all at 9%-13% cap rate. You pay the same cap as the rest of the country but you get the risk factor cut in half. Dallas and San Antonio has good deals too so look them up as well. Here is a link to our healthy economy

Sep 13, 2010
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Rob B.
Chandler, AZ

Gary....
You really didn't get the best of answers from the other four individuals. My comment, multi-family is not NNN and full of risk if you don't have experience and more than $2 mm. 2nd comment... if you can find a 10%-12% cap rate, quality NNN, property be very cautious. Very cautious! My 3rd comment... again if you do not know what you are doing avoid "tax liens and tax deeds". These are a mine field located with hidden problems. 4th comment... this was a good pitch for Houston, TX. It might not be a bad place to find a higher cap rate, fast food, quality NNN property. You will likely be looking at an 8% cap rate tops. (A good quality NNN property with a longer lease can be further from home and not pose tremendous problems, since it is virtually management free. A coupon clipper if you will. Good luck.
Rob Baird, CA RE Lic. #544165 (One of the oldest, active licenses in CA)
951 515-5855

Sep 15, 2010
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clyde l.
Owner/Investor
Smyrna, DE

i have reviewed the answers to the respondents and it seems to me it all depends the financing available to which direction you want to partake in. I you have the right funding sources you could effectively buy 2B in properties with 2M down and selectively sell the properties you did not want with financing in place or you could actually do NNN with 100% financing. So it all depends on your knowledge of the markets.

Sep 23, 2010
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Jerrold B.
Broker/Agent
Springfield, PA

First thanks for the dream. I would purchase (3) 15,000-25,000 sq foot building that can be converted into retail shops or service centers. ex.daycare,community center, mini market. I would spend less than 750,000 on properties which I would now own and build cedar-block frame building and lease out space according to the need of the lessee.
3 bldg = 75,000 PER YEAR X 5 = 4.5MIL INCOME - COST OF BUILDING = 1.5 MIL NET PROFITS

Sep 23, 2010
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Van N.
Owner/Investor
Vancouver, WA

If I had 2mil cash in my hand, I would buy a $15,000,000 income producing property and generate at lease $600,000.00 passive income a year.

Sep 23, 2010
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Arthur C.
Owner/Investor
Louisville, KY

Like most folks here suggested, one would spend 2 mil cash on some high quality (e.g. Walgreen, Jack in the box, bank(BOA, Chase...etc), other S&P highly rated corps........etc.)/high return (50% or 100% -- e.g. REO...etc.) NNN commercial.
For example, a REO can include a new Walgreen (if open-can be flipped for fast return or keep for long term tax and appreciation), new Jack in the box (if open - same exit strategy), a out lot for bank ground lease (need to be leased for short term or long term profit ), and some vacant brand new class A retail space (vannila shell- need to be leased for short term or long term profit). The pros of this example is quick return after flipping (here are Walgreen and JIAB). The cons are vacant spaces of this example will have holding risk involved - time, tenant incentive/allowance, listing costs..etc.

Sep 26, 2010
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Jeff R.
Lender/Mortgage Broker
Birmingham, MI

I like Arthurs answers, go the AAA route and get 20 year lease with a B of A, Walgreens etc.

Dec 24, 2010
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