The relationship of a Commercial Real Estate’s Cap Rate and a Federal Reserve’s 10-Year Treasury Rate

Commercial Real Estate’s Cap Rate is average 436 bps over 20 years reference to Federal Reserve’s 10-Year Treasury Rate.  In fact, its average from 1990 to 2000 is 450 bps and its average from 2002 to 2015 is 425 bps.

Transactions in 2015 are on course to exceed pre-recession peak levels, and most property sectors continue to see inflows of equity and disciplined underwriting by debt providers. With positive economic trends lifting gauges of property performance, commercial real estate remains a favored asset class on a risk-adjusted basis.

10YR Treasury Rate and CRE CAP

Another words, the sophisticate and savvy CRE’s investor are studying and analyzing carefully its Federal Reserve’s 10-Year Treasury Rate in order to make an informed decision on his next acquisition.  It would help reduce his risk significantly.

Fed Reserve 10 Year Treasury Rate from 1990 thru 2015 2

CRE-CAP rate-spread-to-10-year-treasury-large

Commercial property sectors continue to perform well amid this extended period of low interest rates and the Federal Reserve’s decision will not disrupt property performance

  • The Federal Reserve opted Thursday 9/17/15 to maintain its benchmark lending rate at or near zero percent. While acknowledging that the U.S. labor market continues to improve, the central bank also heeded softer conditions in foreign economies in reaching its decision to defer the first hike in the Federal Funds rate in approximately nine years. Fed Chair Janet Yellen and voting members of the policy committee will proceed cautiously, monitoring for contagion risks from other countries that could adversely affect U.S. economic performance.
  • The Fed’s next opportunity to take up the rate hike question comes at its meeting next month, but it may wait until December to act. Until the next meeting, the Fed will scrutinize incoming data on economic momentum, inflation trends, and international volatility. Mortgage spreads widened during the summer in anticipation of a rate increase, and little appreciable effect on spreads is likely to occur in the near term.
  • The central bank’s decision to hold will likely spark a new round of questions about the strength of the U.S. economy in spite of relatively strong underlying fundamentals. Through August, the labor market had added an average of 212,000 jobs per month, an amount less than the pace set in 2014 but sufficient to support a forecast of 2.7 million positions this year. Factors weighing on the U.S. economy, however, include soft exports stemming from the strong U.S. dollar and anemic inflation principally related to low gas prices. Core inflation, which strips out volatile food and energy, rose only 1.8 percent year over year, below the Fed’s target threshold of 2.0 percent.
  • Commercial property sectors continue to perform well amid this extended period of low interest rates and the Federal Reserve’s decision will not disrupt property performance. With job growth generating new commercial space demand that dramatically outpaces construction levels, vacancy in the primary property segments remains on track to decline this year and support additional rent gains. Apartment construction has ramped up, but favorable demographic trends and challenging conditions for first-time homebuyers will continue to sustain extremely low vacancy in the multifamily sector.
  • Low-interest rates, steady performance gains, and competitive yields are supporting investment in a wide array of commercial properties. Transactions in 2015 are on course to exceed pre-recession peak levels, and most property sectors continue to see inflows of equity and disciplined underwriting by debt providers. With positive economic trends lifting gauges of property performance, commercial real estate remains a favored asset class on a risk-adjusted basis.

Learn more of investment in Net lease CRE

Should you have further clarification, please sign-up for our free 30-minutes confidential consultation.


Related blogs:

  1. Big Buyer of Net Lease Report – March 2015
  2. Top 6 Terms You Should Know Before Investing in net lease commercial real estate
  3. First Key selection of net lease Commercial Real Estate investment…?
  4. Net Leased Commercial Real Estate (NNN CRE): Step #2
  5. Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?
  6. How much McDonald invests in net lease commercial real estate?
  7. TOP Net Lease CRE Investment Books – April Selection! **Additional 10% discount!
  8. Case Study: Sale-Leaseback Technique of Wendy’s and McDonald
  9. What is an alternative investment real estate versus vacation home…?
  10. In Hong Kong, the “Mosquito Apartments” sells for $US 2,872 per square foot
  11. Net lease or Triple-net Lease is an Alternative Solution for Removing 12 Headaches in Real Estate Rental
  12. Net Lease Case Study: Family Dollar

If you would like to inquire about our Concierge Services, please sign-in our free consultation


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DAJK GROUP is the place where investors, business owners, and entrepreneurs can research and find useful information, insight, resources, advice, guidance, and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy.  Sign-up for a free 30-minute consultation with us now!

Growing, Evolving and Pushing Forward!

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Net Lease’s Sale leaseback and Built-to-Suit Strategy

Net Lease’s Sale-leaseback and Built-to-Suit Strategy

The growing business who owns real estate can raise an inexpensive working capital and/or debt reduction with Net Lease’s Sale-leaseback and Built-to-Suit Strategy.

DAJK GROUP NNN

Sale-Leaseback Strategy

Sale-leaseback strategy is a form of financing in which a company sells its real estate for cash and simultaneously signs a long-term lease with the buyer. Sale-leaseback transactions provide the lessee company with a source of capital that is an alternative to other financing sources such as corporate borrowing, mortgaging real property or selling shares of common stock.

Net Lease_Sale Leaseback Diagram

A Seller/Tenant is able to convert the value of real estate assets into working capital it can use to:

  • Pay-down debt
  • Fund acquisitions
  • Reinvest in the core competencies of its business

Build-to-Suit Strategy

Through build-to-suit strategy, Investor/Lender (“Investor”) provides a growing company with the funding for the expansion of an existing facility or the construction of a new facility in a different location.  Investor can source, facilitate, arrange, structure and close the build-to-suit transaction.

Net Lease_Built-to-Suit Diagram

The build-to-suit provides innovative financing for:

  • Expanding existing facilities/constructing new facilities
  • Debt reductions
  • Mergers & acquisitions
  • Leveraged/management buyouts
  • Corporate restructuring/exit financing
  • Acquiring addition facilities, technology, and equipment to grow business
  • Transition out of a synthetic lease, mortgage or other binding debt instruments
  • Matching long-term assets with long-term liabilities

Case Study:  WPC’s Key Facts of Net Lease’s Sale-leaseback and Built-to-Suit Strategy

W. P. Carey Inc. announces that it has acquired a portfolio of three truck and bus servicing facilities for approximately $42.9 million. The facilities, two in Germany and one in Austria, were purchased from the developer and are net leased to wholly-owned subsidiaries of MAN SE for a period of 15 years. (PRNewsFoto/W. P. Carey Inc.)
W. P. Carey Inc. announces that it has acquired a portfolio of three truck and bus servicing facilities for approximately $42.9 million. The facilities, two in Germany and one in Austria, were purchased from the developer and are net leased to wholly-owned subsidiaries of MAN SE for a period of 15 years. (PRNewsFoto/W. P. Carey Inc.)
  • Well-established, industry-leading tenant: The MAN Group is one of Europe’s leading producers of commercial vehicles, engines and mechanical engineering equipment. It is a publicly traded company with a market capitalization of approximately $15 billion and is 75% owned by German automotive group Volkswagen AG.
  • Critical, well-located facilities: The three facilities, originally built to tenant specifications, are among the largest service stations operated by the MAN Group and serve as an important sales driver for its 24/7 fleet repair and maintenance servicing operations. Located on arterial routes, the facilities benefit from the high commercial traffic flow that connects several major German and Austrian cities and links Europe’s eastern and western markets.
  • Long-term net leases with built-in rent growth: All three facilities are net leased, with a remaining term of approximately 15 years and CPI-based rent escalations.

Reference:  NEW YORK, Sept. 9, 2015 /PRNewswire/ — (NYSE: WPC), a real estate investment trust specializing in corporate sale-leaseback and build-to-suit financing, and the acquisition of single-tenant net lease properties, announced today that it has acquired a portfolio of three modern truck and bus servicing facilities for approximately $42.9 million (€38.9 million). The facilities — two in Germany and one in Austria — were purchased from the developer, Wohnungsunternehmen Semmelhaack, and are net leased to wholly-owned subsidiaries of MAN SE (The MAN Group).

[Learn more…]

For further discussion, please sign-up for our free 30-min confidential consultation

Growing, Evolving and Pushing Forward!


Related blogs:

  1. Big Buyer of Net Lease Report – March 2015
  2. Top 6 Terms You Should Know Before Investing in net lease commercial real estate
  3. First Key selection of net lease Commercial Real Estate investment…?
  4. Net Leased Commercial Real Estate (NNN CRE): Step #2
  5. Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?
  6. How much McDonald invests in net lease commercial real estate?
  7. TOP Net Lease CRE Investment Books – April Selection! **Additional 10% discount!
  8. Case Study: Sale-Leaseback Technique of Wendy’s and McDonald
  9. What is an alternative investment real estate versus vacation home…?
  10. In Hong Kong, the “Mosquito Apartments” sells for $US 2,872 per square foot
  11. Net lease or Triple-net Lease is an Alternative Solution for Removing 12 Headaches in Real Estate Rental
  12. Net Lease Case Study: Family Dollar

If you would like to inquire about our Concierge Services, please sign-in our free consultation

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DAJK GROUP is the place where investors, business owners, and entrepreneurs can research and find useful information, insight, resources, advice, guidance and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy.  Sign-up for a free 30-minute consultation with us now!

Growing, Evolving and Pushing Forward!

Net Lease Case Study: Checkers Restaurant [**ABS SLB (15)]

**Absolute:  ABS

**Sale leaseback:  SLB

Checkers – Part of Rare Portfolio of 9 [ABS SLB (15)]

Checkers Restaurant

Address:  3150 East Bay Drive | Clearwater, FL 33771

Purchase Price: USD 868,400

Fixed Annual Income:  4.50%

Offer Summary:

Price:
$868,400
Cap Rate:
4.50%
Property Type:
Retail
Building Size:
+/-738 SF
Land Area:
+/-0.42 Acres
Property Use:
Restaurant
Current NOI:
$580,342 (Portfolio)
Lease Term:
NNN
Location:
Clearwater, FL

Location Description

Clearwater, FL is a year round vacation destination, with a strong population of over 110,000 within a 3-mile radius of the subject property. The property is on a desirable hard corner along a dense retail corridor with close proximity to Publix, LA Fitness, Winn-Dixie, Wal-Mart, PTEC Clearwater campus, Southeast College, and The Belcher Soccer Complex. The St. Petersburg-Clearwater International Airport is +/- 4.3 miles away.
Portfolio Locations: AL, FL, GA, and MI.

Highlights

Clearwater, Florida Hard Corner Location | Vacation Destination – Clearwater is a year-round vacation destination, with a strong population of over 110,000 within a 3-mile radius of the subject property. The property is on a desirable hard corner along a dense retail corridor with close proximity to Publix, LA Fitness, Winn-Dixie, Wal-Mart, PTEC Clearwater campus, Southeast College, and The Belcher Soccer Complex. The St. Petersburg-Clearwater International Airport is +/- 4.3 miles away.

Part of Rare Portfolio of 9 Assets with Geographic Diversity – The subject property is part of a portfolio of Checkers’ last corporate-owned stores, offering investors immediate geographic diversity across four states in the portfolio at a discounted total portfolio price. All stores have been in operation for over twenty years and a majority of the stores have been upgraded recently.

Corporate Sale-Leaseback | 15-Year Term – Long-term sale-leaseback opportunity backed by a highly secure restaurant chain. Each lease will include two (2), five (5) year renewal options.

Absolute NNN Lease – No landlord responsibilities.

Strong Rent Escalation – The Checkers leases include 10% rental increases every 5 years, providing a hedge against inflation.

Low Rent-to-Sales Ratio – All locations have a low 6% store rent-to-sales ratio, allowing sufficient operating cushion for each restaurant.

Growing QSR Chain – Checkers opened 35 new locations in 2014 and has plans to continue to grow in 2015 with 80 locations approved.

Established Chain with High Average Sales – Checkers is the nation’s largest chain of double drive-thru restaurants with over 800 locations. In Nation’s Restaurant News’ Top 100 census, the company is ranked No. 89 in U.S. sales. The average corporate Checkers reported +/- $1 million in net sales.

[Learn more…]

For further discussion, please sign-up for our free 30-min confidential consultation

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Related blogs:

  1. Big Buyer of Net Lease Report – March 2015
  2. Top 6 Terms You Should Know Before Investing in net lease commercial real estate
  3. First Key selection of net lease Commercial Real Estate investment…?
  4. Net Leased Commercial Real Estate (NNN CRE): Step #2
  5. Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?
  6. How much McDonald invests in net lease commercial real estate?
  7. TOP Net Lease CRE Investment Books – April Selection! **Additional 10% discount!
  8. Case Study: Sale-Leaseback Technique of Wendy’s and McDonald
  9. What is an alternative investment real estate versus vacation home…?
  10. In Hong Kong, the “Mosquito Apartments” sells for $US 2,872 per square foot
  11. Net lease or Triple-net Lease is an Alternative Solution for Removing 12 Headaches in Real Estate Rental
  12. Net Lease Case Study: Family Dollar

If you would like to inquire about our Concierge Services, please sign-in our free consultation


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DAJK GROUP is the place where investors, business owners and entrepreneurs can research and find useful information, insight, resources, advice, guidance and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy.  Sign-up for a free 30-minute consultation with us now!

Growing, Evolving and Pushing Forward!

Net Lease Investor’s Options and/or Alternatives

DAJK GROUP NNN

 

Net lease investor’s objective is:

1) his target CAP rate;

2) with high or with the lowest net lease management fee.

 

There is a San Diego-based Net Lease Management.

http://netleasedmanagement.com/

“Net Leased Management is a cost-effective administrative and management support solution for net-leased property owners. For a small monthly fee, Net Leased Management provides accounting services, monthly financial reporting, lease administration, property-tax compliance and insurance compliance; handles any landlord obligations; and conducts site visits as needed. We also provide access to a master insurance policy for investors to capitalize on bulk pricing and increased limits.”

 

[Full article…]

 

Please note a Higher CAP rate is higher the risk and more involvement with property management.

 

Is there any alternative without paying fee or paying the lowest to net lease management?

 

Yes, I highly recommend all our clients/investor to select only a true triple net lease or an absolute NNN lease.

The more fees investor is paying for a third party; his return of investment would be reduced proportionally as well.

In fact, different net lease investor has different investment objectives.  My task is providing all options both pros and cons and both advantages and disadvantages.

Strategically, when the net lease investor combines with his high taxable income with his net lease investment, it would be a greater benefit for him in a long-term investment.

This strategy would accomplish reducing taxable liability: converting his short term to long term gain which in turn will be taxed at the lowest tax bracket, his fixed income from lease revenue is a passive income to an investor.  [Learn more…]

I would inform all my clients about these options and they need to decide how they would like to proceed.

[Learn more…]

 

Growing, Evolving and Pushing Forward!

 

Related articles:

  1. Big Buyer of Net Lease Report – March 2015
  2. Top 6 Terms You Should Know Before Investing in net lease commercial real estate
  3. First Key selection of net lease Commercial Real Estate investment…?
  4. Net Leased Commercial Real Estate (NNN CRE): Step #2
  5. Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?
  6. How much McDonald invests in net lease commercial real estate?
  7. TOP Net Lease CRE Investment Books – April Selection! **Additional 10% discount!
  8. Case Study: Sale-Leaseback Technique of Wendy’s and McDonald
  9. What is an alternative investment real estate versus vacation home…?
  10. In Hong Kong, the “Mosquito Apartments” sells for $US 2,872 per square foot
  11. Net lease or Triple-net Lease is an Alternative Solution for Removing 12 Headaches in Real Estate Rental
  12. Net Lease Case Study: Family Dollar

 

If you would like to inquire about our Concierge Services, please sign-in our free consultation


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DAJK GROUP is the place where investors, business owners and entrepreneurs can research and find useful information, insight, resources, advice, guidance and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy.  Sign-up for a free 30-minute consultation with us now!

Growing, Evolving and Pushing Forward!

Rent to Own or Lease Option Strategy (“R2O”): Case Study Wall Street Firms

Rent2Own

Home Partners of America has received $US 500 million equity investment for R2O.

Home Partners’ Acquisition’s requirements:

  • Suburban location with a strong school system
  • Home price: from $100,000 to $725,000
  • Term: within 5 years
  • Purchase Price: increase annually; a markup 28% from initial list price or 5.6% per annum.
  • Lease: increase annually or 16% from initial lease rate or 3.2% per annum
  • Metropolitan Areas: 15 states, including California, Florida, and Texas.
  • Target Tenant/optionee: middle-class and affluent clients who have steady jobs and an overall financial history.

Other Wall Street FirmsNew York City-based HomeLPC and Premium Point Investments.


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For tenant/optionee, they are paying a premium over renting and buying a typical home.  These homes are in better neighborhoods with better school districts than most single family rental properties.

Alternative for saving more money:  Tenant/Optionee can seek for:

  • For sale by owner with cosmetic fixer property.
  • Negotiate a fixed lease and lock in the purchase price within 5 years.
  • For sale from HUD home

For small operator/beginner in rental investor:  Emulate Home Partner’s acquisition requirements.  You can begin with one property at the average home price in your area.

For further discussion, please sign-up our free 30-min confidential consultation.

Related Resources at Amazon Corner:

  1. Retire Rich with Rentals: How to Enjoy Ongoing Cash Flow From Real Estate
  2. Passive Income Assets: Building A Simple Passive Income From Real Estate Investing (Passive Income For Beginners)
  3. Rent to Own Essential Guide for Homebuyers
  4. Move in Now Buy Later: How You Can Have a New Home Without Perfect Credit or Tons of Cash
  5. The 7-Step Lease Option Refinance Strategy
  6. How to Buy Real Estate Without a Down Payment in Any Market

Referencerent-to-own-homes-make-a-comeback

For further discussion, please sign-up our free 30-min confidential consultation.


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DAJK GROUP is the place where investors, business owners, and entrepreneurs can research and find useful information, insight, resources, advice, guidance, and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy.  Sign-up for a free 30-minute consultation with us now!

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Net Lease Case Study: Kevin OLeary’s O’Shares ETF versus Net Lease Strategy

O'Share ETF vs Net Lease Strategy

Exchange Traded Fund Definition

An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated once at the end of every day like a mutual fund does.

Read more: http://www.investopedia.com/terms/e/etf.asp

Kevin O’Leary’ OShares

After she died I became the executor of her estate and for the first time saw the results of 50 years of investing in only dividend paying stocks. Her returns were stunning. She was not a financial advisor but she believed in the principle that you should get paid while you wait. To her a stock that did not pay a dividend was simply a speculation not an investment because you could only make money if the stock went up. Dividends assured her of income and she would only spend that.

Seeing the results of her philosophy changed my mind about investing forever. I did some research. Did you know that over the last 40 years over 70% of the markets return came from dividends, not capital appreciation? That settled it for me, today I never invest in stocks that don’t pay dividends.

Full article at https://www.linkedin.com/pulse/my-love-dividend-paying-stocks-made-me-create-own-etf-kevin-o-leary

Our Net Lease Strategy has 4 similar characteristics and 4 distinct and unique advantages over dividend paying stocks

Our comments on 7/14/15 14:15 PST

Mr. O’Leary,

Thank you for sharing your story regarding your mother’s investment philosophy.

  • Investor only requires to master few investment principles/strategies so that he can invest money on his own without a financial advisor.  Of course, he needs to a) search and select right dividend paying stocks; 2) strategize for a long term objective is 40 to 50 years.

A similarity with your mother’s investment philosophy, our Net Lease Strategy has 4 similar characteristics and 4 distinct and unique advantages over dividend-paying stocks.

  1. The investor in Net Lease property (“Net Lease” or ”NNN”) also requires to master top six (6) net lease terms.
  2. The investor also requires to research, analyze, due diligence and review his acquisition. Since lease agreement is guaranteed by a tenant, therefore, tenant’s net worth must be at $US 100+ million in last 12 months.  For example, it describes in details in Case Study Family Dollar.
  3. The investor in Net Lease also receives his monthly fixed income, called capitalization rate or short for CAP rate or just CAP. In fact, if net lease properties cannot pay CAP (positive cash flow at closing), it just a speculation.
  4. The investor in Net Lease property understands and seeks for long-term investment objective. It is a minimum of 5 years for Net Lease.
  5. Investor’s monthly income is a passive income, which taxed at lower tax rate than the earn income.
  6. The investor in NNN can leverage using mortgages or OPM if he wants to. This is a great option.
  7. The investor in Net Lease can purchase insurance against his underlined net lease property. This is a requirement for protecting his funds.  In contrast, you cannot buy insurance against dividend-paying stocks.
  8. The investor in NNN has full control of his investment. He can re-fi with cash out, cross collateral, sell and lease back or SLB, sell with seller finance or wrap-mortgage.

Additional of the net lease can be found at http://www.dajkgroup.com/net-lease-investment.html.  It is including case studies and our monthly selections.

Your Shark Tank’s episodes are always enjoyable, entertaining and packed of valuable investment strategy and creative structured finance.

Thank you for your time, Kind regards

Related blogs:

  1. Big Buyer of Net Lease Report – March 2015
  2. Top 6 Terms You Should Know Before Investing in net lease commercial real estate
  3. First Key selection of net lease Commercial Real Estate investment…?
  4. Net Leased Commercial Real Estate (NNN CRE): Step #2
  5. Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?
  6. How much McDonald invests in net lease commercial real estate?
  7. TOP Net Lease CRE Investment Books – April Selection! **Additional 10% discount!
  8. Case Study: Sale-Leaseback Technique of Wendy’s and McDonald
  9. What is an alternative investment real estate versus vacation home…?
  10. In Hong Kong, the “Mosquito Apartments” sells for $US 2,872 per square foot
  11. Net lease or Triple-net Lease is an Alternative Solution for Removing 12 Headaches in Real Estate Rental
  12. Net Lease Case Study: Family Dollar

If you would like to inquire about our Concierge Services, please sign-in our free consultation


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*** TAKE ADDITIONAL 10% OFF for ALL FIRST TIME PURCHASER


DAJK GROUP is the place where investors, business owners and entrepreneurs can research and find useful information, insight, resources, advice, guidance and inspiration for acquiring funds for their project, acquisition for their net lease commercial real estate, increasing their assets and running their profitable business.

Our group of expert Oil Trader, Commercial Real Estate Specialist, Asset Management, and Business & Financial Analyst, can help to answer all your questions and to provide you with investment alternative and options catered to your investment strategy.  Sign-up for a free 30-minute consultation with us now!

Growing, Evolving and Pushing Forward!

Net lease or Triple-net Lease is an Alternative Solution for Removing 12 Headaches in Real Estate Rental

Net Lease Solution


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Real estate investment isn’t always a good deal Written by Brent Wilsey –Published by San Diego Source Daily Transcript – Friday, June 5, 2015****

I have found it is much easier to invest in stocks and get returns that are similar, if not better, without the headaches –  Brent Wilsey

Summary of real estate rental in referenced article:

  1. Operating Cost higher than anticipated.
  2. Travel Expenses.
  3. Tenant and property management
  4. California laws definitely favor the renter, not the landlord. Cost of legal ramifications that may come up.
  5. Discrimination laws.
  6. Cost of operating is increased for hiring a property manager.
  7. Cost of operating is increased for not having the cost effective repairman.
  8. Cost of operating is much higher. Therefore your Net Operating Income is reduced.
  9. Tax benefits: All the expenses are deductible and can offset the income that is received. However, some of the losses cannot be deducted until the property is sold.
  10. Operating Cost is including with Certified Public Account (“CPA”)
  11. Investor may be subject to an additional 3.8 percent tax
  12. I have found it is much easier to invest in stocks and get returns that are similar, if not better, without the headaches.

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For an argument sake, let’s agree these 12 issues are concerned to real estate investor’s Net Operating Income (“NOI”).  What is the alternative solution for real estate investor?  Can real estate investor invest without these 12 headaches?

ABSOLUTELY!  The answer is Net Lease or Triple-Net Lease (“NNN-CRE”).

We believe NNN-CRE can remove these 12 headaches for real estate investor.  Learn more please review our previous blogs:

  1. Top 6 Terms You Should Know Before Investing in net lease commercial real estate
  2. First Key selection of net lease Commercial Real Estate investment…?
  3. Net Leased Commercial Real Estate (NNN CRE): Step #2
  4. BIG BUYER of NET LEASE REPORT – March 2015
  5. How much McDonald invests in net lease commercial real estate?
  6. Case Study: Sale-Leaseback Technique of Wendy’s and McDonald
  7. What is an alternative investment real estate versus vacation home…?
  8. In Hong Kong, the “Mosquito Apartments” sells for $US 2,872 per square foot
  9. TOP Net Lease CRE Investment Books – April Selection! **Additional 10% discount!

References:

  1. ****http://www.sddt.com/Commentary/article.cfm?Commentary_ID=15&SourceCode=20150605tbi&_t=Real+estate+investment+isnt+always+a+good+deal#.VYIhRflVikp
  2. ****Real estate investment isn’t always a good deal_San Diego Source

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