An exit strategy is vital as you seek to get a property with a triple net lease for sale. While some people like to keep their NNN properties, there are instances when selling is the right choice.
At Net Lease World, we work to provide investors like you with the right solution that best fits their needs. Whether looking to upgrade to a property with a higher NOI or to accommodate a tenant, we’re here to help.
Today, we’ll discuss a few things you should do before selling your NNN lease property.
Know What Your Goals Are
When doing something as big as selling a triple net property, it’s important to ask yourself why this decision is right for you. Below are common questions that help you determine the “why” of your next investment choice.
Are you seeking office space for your business or just looking to make a pure investment?
What are your short-term and long-term plans?
Are you hoping to obtain a specific income?
Do you want to be hands-on or hands-off in your investment decision?
By addressing these questions, you’ll be able to plan accordingly for a successful sale.
Develop A Proactive Tax Plan
When going through the sales process, you’ll be liable for capital gains and other taxes. That’s why you should perform a 1031 exchange. This gives you time to choose a new property and make any upgrades before the time limit. Keep in mind that you’ll have 180 days to complete the process.
Having a tax plan in place is even more vital if the property has multiple owners. In this case, the owners may decide to overhaul the partnership before the sale.
Inspect The Lease Files
Before selling, you’ll need to make the lease terms available to the buyer. Also, include any letters and emails from the tenant.
For the right of first refusal cases, follow the right steps to ensure a proper sale. Some cases only state that the tenant can purchase the property before it’s on the market. Others are more specific and list the property price along with the terms of how it’s sold.
With that said, exercise due diligence and communicate with the tenants about the lease rules. This is especially crucial if they seek to buy the property.
Assess Your Loan Terms
If you have a loan for your NNN property, have a lawyer review the loan terms. For example, a CMBS loan contains extra analysis for the sales process.
If the buyer can take over the loan, you can obtain a higher sales price. To achieve this, keep the length of the transaction in mind to ensure the deal meets the time limits.
Have All Due Diligence Documents Ready
Before beginning the sale, make sure to prepare the documents needed to make the process efficient. Here is a list of due diligence documents you’ll need to speed things up.
Proof of maintenance
Proof of the tenant’s finances
Store P&L statement
This helps give all parties a clearer picture of the property as you begin negotiating offers.
Choose Triple Net Lease For Sale Methods That Bring You Results
Putting a property with a triple met lease for sale can be a pivotal decision. If you choose to go this route, follow these five steps to achieve the best results. To learn more on how to get the best value for your investment, contact Net Lease World today. Our team will help provide you with strategies that put your needs first.