NES Financial | JTC recently sat down with Alan Fruitman, founder of 1031tax.com and author of The NNN Triple Net Property Book, to discuss the popular concept of triple net (NNN) properties. Fruitman is a highly regarded real estate broker and recognized expert in NNN property, possessing years of experience assisting clients with their real estate acquisitions.
Alan Fruitman: With a true NNN lease, the tenant maintains and pays 100% of the physical property, common area maintenance, taxes, and insurance. This type of leasing agreement is best suited for an investor who does not want to assume any property management responsibilities.
NESF | JTC: What is your background in this field?
Alan Fruitman: I began selling real estate in 1993 and transitioned to only selling NNN property in 2000. Since 2000, I have sold more than $1 billion worth of NNN property alone.
NESF | JTC: The NNN Triple Net Property Book has been called “a must read for anyone interested in investing in income-producing real estate.” What made you want to write this book?
Alan Fruitman: At the time, the industry lacked many answers to questions about NNN. I wrote the book as a way to educate and inform people on the basics.
NESF | JTC: What information provided in the book do you think people should be most aware of?
Alan Fruitman: The book answers questions that both seasoned and new investors would benefit from. For example, it looks at the various steps involved in the buying process. It helps define and describes all the components of both the property and buying process, ranging from reviewing property brochures, to choosing which property you wish to purchase, to submitting a letter of intent to purchase that property, as well as conducting a property analysis, and finally, closing the property.
NESF | JTC: Are NNN properties good candidates for 1031 exchanges?
Alan Fruitman: A 1031 exchange calls for the exchange of “like-kind” property, which includes NNN. For investors of NNN property, a 1031 exchange is actually a great tool they can use to not only defer taxes, but also consolidate and diversify their portfolios. This type of transaction also helps simplify things for the investor, like leaving maintenance and repairs for future tenants.
NESF | JTC: As a long-time partner of ours, what makes you continue to refer clients interested in doing a 1031 to us?
Alan Fruitman: When my clients are interested in doing a 1031 exchange, I recommend they go to NES Financial | JTC to help them facilitate the process for a couple of reasons. First and foremost, you have the most experience and expertise in the industry. Your General Counsel used to work at the IRS and wrote 1031 guidance there! What other QI can say that? Also, your 1031 Exchange Solutions are proven to work on any type of property or deal size, and I can rest assured knowing your team of experts will get the job done right.
NESF | JTC: What are your predictions on the future of this industry?
Alan Fruitman: There is and will always be a tremendous demand for NNN property. This is because tenants normally have investment grade credit by S&P and sign 10-25 year corporately guaranteed leases. NNN is not going to go away anytime soon.
NESF | JTC: Thank you Alan! We appreciate you taking the time to speak with us.
Alan Fruitman: No problem, thank you.
NES Financial | JTC welcomes your questions and opinions. Allow us to address your business needs by contacting us. We look forward to hearing from you!