Top 8 Proven Tips to Buy a NNN Property for your 1031 Exchange

If you are in a 1031 Exchange, either now or in the near future, this video is for you. I’m going to share with you our Top 8 Proven Tips to Buy a NNN Property for your 1031 Exchange. A NNN property is the best replacement alternative for your 1031 Exchange. The Tenant takes care of pretty much everything, and your rental income is net.

Hi, my name is Alex Casablanca, Managing Broker at Casablanca Commercial Real Estate. We are a boutique brokerage firm based in Orlando, Florida, specializing in selling NNN Lease Investment Properties. We represent NNN Buyers and 1031 Exchange investors in finding and negotiating the best NNN property according to their investment goals and risk tolerance. 

Now, let’s get started with our Top 8 Proven Tips to Buy a NNN Property for your 1031 Exchange.

Tip 1. Start Early & Hire Key Competent Professionals

Starting early is one of the most important factors for a successful 1031 Exchange. Once you put your property on the market, start by assembling an experienced group of 4 key professionals. 

First, you need to team up early in the process with an experienced and knowledgeable NNN Buyer’s Broker that can represent your interests exclusively, that can not only help you searching for suitable replacement properties, but also navigate the complexities of the market. Your Buyer’s Broker is your strategic partner, not just a property finder.

We will handle market research, property evaluation, offer negotiations, due diligence, and closing coordination. Our Buyer Representation services are free for our Buyers and we even give you back up to $10k for closing costs, so it’s a win-win proposition for you as a Buyer.

Then, must also team up with an experienced Real Estate Attorney with previous experience with NNN transactions, and an experienced Accountant that is knowledgeable of the IRS 1031 exchange rules and guidelines. 

Finally, you must choose early your 1031 Exchange intermediary company, they will be the recipient of the proceeds of the property that you are selling, so it’s important to choose them early in the process.

Tip 2- Define Your Acquisition Criteria. In other words, know exactly what you are looking for:

Your acquisition criteria will be a determinant in the success of your transaction, so have the following clear from the get-go.

First, Define Your Price Target (what is the net dollar amount to replace from your 1031 Exchange proceeds). Then, it is important to have a clear indication of your Cap Rate Expectations, years remaining on the lease, preferred locations, and the Tenants of Interest to focus on.

Having a clearly defined investment criteria from the beginning is very important. As your Broker, we can focus on looking for properties that are aligned with your criteria.

Tip #3 Focus on “Amazon Proof” type of Tenants. In other words, focus on companies that provide essential products or services to the consumer, such as Food, Gas, Medical Care, Groceries, Discount or Dollar Stores, Convenience Stores, among others. 

Bear with me on this: The best NNN Property for your 1031 Exchange is the one in which the Tenant provides an essential and irreplaceable product or service to the consumer. As we all know, technology has created drastic changes in consumer spending and behavior. Nowadays, we can buy pretty much anything on Amazon, so it is very important to focus our search on properties and brands that could be considered “Amazon Proof”. 

Tip #4 Do not limit your property search to just one state or one area. 

Most investors initially start looking for properties near to where they live or an area that they are most familiar with. Although that is not necessarily wrong, have this concept in mind. The best property is not the one that is closer to where you live; the best property is the one in the best location, the best tenant, the best demographics, and the best Real Estate fundamentals in general. If that property is closer to where you live, that’s the ideal scenario. If not, we will help you find a replacement property with the best real estate fundamentals regardless of where it is located. 

Location is one of the most important factors when buying any type of property, so you have to choose wisely.

Tip 5 – Start Submitting Offers once the Due diligence of the property that you are selling expires. 

Once you have a clear picture of when you are going to close on your existing property is when we start submitting offers. As your Buyer’s Broker we will start actively looking for properties within your criteria, and assist you in starting to submit offers on the ones that you have the most interest in. 

Tip 6- Have your #1 Property selection under contract before your 45 days expires.

This is one of the absolute most important. The only way to secure a property is by putting it under contract. Some investors focus on submitting as many offers as they can, but by submitting offers or even having them accepted, you don’t secure a property. Yes, you can identify three properties, but you have to buy 1, and that number 1 you have to put it under contract in order to secure it.

As your Broker, we work with the goal of helping you to have your #1 property selection under contract before your 45-day identification period expires. Your Real Estate Attorney will be a key part of that process as well, he or she should move quickly and decisively, reviewing all the documentation, so you can secure your #1 option under contract as quickly as possible.

Tip 7- Go and Visit the Property

Once you have your #1 property selection under contract, if you are planning to go and see the property, arrange a visit to the property as quickly as possible, so you can be sure early in the process that you feel comfortable and you don’t have any objections with the property or the location. 

Tip 8. Close on your first property selection, ideally no later than 30 days after the 45-day identification period has expired.

Now it’s the time to close and you should close as early as the transaction make it possible. Although the IRS gives you a total of 180 days to close since the day that you closed on your property, I always recommend my clients to aim to complete the closing no later than 30 days after your 45 days identification period has expired; the sooner the better to avoid last minute delays.

So, let’s recap, the Top 8 Proven Tips for a Successful NNN 1031 Exchange Are:

  1. Start Early by assembling an experienced group of professionals
  2. Define Your Acquisition Criteria
  3. Focus on Amazon Proof Tenants. Tenants that provide essential products or services to the consumer.
  4. Do Not Limit yourself to one state or one area. The best property is the one with the best Real Estate fundamentals.
  5. Start Submitting Offers once you have a clear picture of the closing date of your property.
  6. Have your #1 Property Selection Under Contract on or before your 45 days identification period expires.
  7. Arrange a Visit to the Property that you put under contract
  8. Close on your first property selection ideally 30 days after your 45-day identification period has expired.

Although a 1031 Exchange process could be seen as stressful and overwhelming, the key is to start early and hire the key competent professionals to assist you. If you do that, the process can really become really straightforward and stress-free.

At Casablanca, we specialize in representing NNN Buyers and 1031 Exchange Investors. We have the knowledge and expertise to guide you along the way, from market research, identifying potential properties, submitting offers and negotiating them, due diligence, up to the closing table. 

Moreover, we represent our Buyer’s for Free since we get paid from the Seller, and we also offer our Buyers up to $10K credit towards the Buyer’s closing costs expenses. This incentive will offset or cover completely some of the major Buyer’s closing costs expenses such as title fees, attorney fees, recording fees, among others. We are the Brokers that give you more in exchange for your trust. 

If you have any questions or need guidance with your upcoming 1031 exchange, call me at 407-205-7570 or email me at [email protected], and I will be in contact with you. Thank you so much for watching this video and if you found this helpful, please like this video and consider subscribing to the channel for more upcoming videos about NNN Properties. 

I’m Alex Casablanca, and I am looking forward to working with you in your next 1031 Exchange closing.

Why Choosing to Work with Us as Your Buyer’s Broker?

  • Free Buyer Representation, so you get our expert advice at no additional cost to you.
  • Up to $10,000 credit for Buyer’s closing costs.
  • We specialize in representing NNN Buyers and 1031 Exchange Investors. We represent your interests as a Buyer exclusively, not the Seller.
  • We assist you with market research, property evaluation and selection, offer submissions and negotiations, due diligence and closing
  • Extensive access to property listings through our network of broker colleagues, property owners and developers.
  • Our main goal is to find the best property for you at the best price.

 Send Me More Information  Contact Us by Email Here  Call Us at 407-205-7570

Read Our Full YouTube Videos Legal Disclaimer Here

Legal Disclaimer: Nothing contained in this video and written article should be interpreted as a recommendation or endorsement to purchase, sell, or invest in any specific property or security. The opinions expressed in this video by Alejandro (Alex) Casablanca are personal opinions based on experience as a practicing Licensed Real Estate Broker in Florida, and they do not constitute investment advice nor recommendations to buy or sell any property. Viewers should not rely on any statement made in this video and written article as a guarantee or representation that any particular property or investment strategy is a suitable investment. Opinions expressed in this video and written article are based on information available at the time of recording and are subject to change without notice. Prospective investors must conduct their own independent due diligence and consult with licensed financial, legal, and tax professionals prior to making any investment decision. Investment decisions should be based solely on each individual’s financial circumstances, objectives, and risk tolerance. The Triple Net real estate market is constantly changing and evolving. Changes in tenant financial condition, market conditions, demographics, technological innovation, monetary policy, consumer behavior, and broader economic trends may materially impact property value and performance. A tenant considered strong at the time of recording may experience financial distress in the future, which could adversely affect your investment. Neither Alejandro Casablanca nor Casablanca Commercial Real Estate LLC provide investment advice or assume any liability nor responsibility for any investment decisions made by viewers. For more information, read our YouTube Videos Legal Disclaimer here.