All these questions depend on a few key questions you need to ask yourself (if you are the investor) or your client. First, what is the investment strategy? Meaning, what exactly am I looking to accomplish from NNN real estate investing? This helps drive the next question, what are the 3-5 most important things to this strategy for me? (ie, internal rate of return, cash on cash return, lease terms, location, position, tenant strength, rent growth, long term potential re-use . . . etc, and there are any number of other each investor might have. It is important to remember that you can't have them all, which are the most important?). From there you need to know what risks you precieve in the market, what about an investment worries you the most? Is is re-tenanting the space, having it close by, is it making sure rents are comparable to market today . . . etc. Once you have lined up all of those points, now ask yourself, "In looking at this investment model, does it have to be in-state?" If my most important things are return, lease terms, and tenant strength, why limit yourself to your state? I always try and help my investors who look nationally that are comparing in-state to national investments that you can't expect to have it all. Often you will sacrifice something (close by location) for something else (greater return, longer lease terms). And the reason is nothing more than shear numbers due to limiting yourself to a single market. It also depends on the size of the investor, and other properties owned.
State licensing laws vary from state to state. I for instance will only help sellers of Investment property in Oregon (all over the state) because I am licensed here, however, I will help investors from all over the country buy property all over the country. Typically if there is a licensing problem with helping a buyer we are always more than happy to co-broker a deal to help facilitate transactions if needed.
Aug 5, 2011