Real Estate Investing Without the Hassle

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You don’t know how many times I’ve heard something along these lines from fellow physicians, “I’d love to own a real estate investment property but I don’t want to be called in the middle of the night for plumbing issues. It’s too much of a hassle.”

If this resonates with you, then a great solution for you might be investing in something called a Triple Net Lease (NNN) property. To help me explain what that is, I've decided to write this post in more of a question-answer type format.

What is a Triple Net Lease (NNN)?

A triple net lease is a commercial property in which there is most commonly a single tenant and that tenant is responsible for taking care of any and all issues.

So they take care of “the three nets”:

Net #1 – Property Taxes
Net #2 – Insurance
Net #3 – Maintenance

That means that you as the owner will not get called to unclog a toilet in the middle of the night or deal with monthly utility bills. The tenant is responsible for all of that. Typically there isn’t rapid turnover, so you don’t have to worry about re-renting often and you won’t get called about tenant battles like one tenant playing his music too loud late at night.

Hopefully, you’re seeing that it requires very little management. Essentially all you have to do is basic bookkeeping, file tax returns every year, and make the big decisions like when you want to refinance, sell or exchange the property. This makes it very attractive for owners, particularly those that aren’t in the same location or state.


What Are the Typical Returns and Are There Any Risks?

Because these are considered steady, safer-type investments, returns typically are expected to run in the 5-9% annual return range.

Sounds amazing, right? However, just like in any investment there are risks. The main risk is that the single tenant vacates before the term is up or goes out of business. A good number of these leases are written for 20+ years with slight escalations in line with inflation. So you want to make sure you choose reputable companies in good locations that will be around a while.

What Are Some Examples of Triple Net Tenants?

Common triple net lease property examples are pharmacies (Walgreen’s, CVS), the Dollar Store, Gas Stations, Banks, etc.

How Much Capital Do I Need To Invest in a Triple Net Lease Property?

The difficulty with purchasing reputable triple net leases is that they can be relatively capital intensive, ie. expensive. There are smaller triple net leases that are very reasonable however it’s not uncommon to see the property a Walgreen’s sits on in a good location go for 4-5 million dollars plus.


How Do I Invest In Triple Net Properties?

Do It Yourself

You can absolutely purchase these properties on your own. Leases will typically be in place but you can always hire someone to help handle the lease situation.

Where can you find some of these properties? Ask around and look for agents who specialize in these types of properties. Call any commercial brokerage and they can direct you to someone. You can also look on Loopnet for properties and to get an idea of what the current market looks like

Invest through Funds and Crowdfunding

There are specialized funds that focus on NNN leases and diversify your risk by creating a portfolio of NNN leases. I like to think of it as a mutual fund that focuses on purchasing stock in NNN leases.

You can find these funds on your own or you can utilize real estate crowdfunding platforms to find them on occasion.

I know of one crowdfunding company in particular that specializes in NNN leases. It’s interestingly named, Rich Uncles. It’s founded by the chairman of the largest commercial real estate company in the country, CBRE. Apparently, he’s the “Rich Uncle” we all wish we had.

They have a fund or REIT that basically only invests in NNN leases. You don’t need to be an accredited investor, minimums are $500, and after a year, the investment can be liquid. Historically they've returned monthly dividend payouts around 7% with an expected annual return of 12% over 5 years. Again, though, returns aren’t guaranteed but they seem to choose very conservatively and don’t take on a huge amount of leverage. You can check them out here.


Overall, Triple Net Lease properties may be a very good option for physicians or anyone who wants to invest in real estate, but would rather not deal with the headaches of active management. Sounds pretty passive to me.

Does this sound appealing to anyone? Does anyone have experience with triple net leases? Would love to hear about it.


    • I’ve been thinking about triple net for a while. That’s why I was excited when I found them. I’ve signed up and just deciding how much capital to put towards it. I’ve heard from a few who have, and they’ve received returns in line with what they expected.

  1. I have a little bit of experience with triple nets.
    They worked well for me.
    There is opportunity in health care for that.
    It is great to not worry about all the expenses.
    I know of a guy who owns 4 dollar general stores. All triple net leases. He does virtually nothing to maintain them. They each pay about 80K. He has 320K coming in as income from those stores. Not a bad passive stream, eh? Some of us could even live on that!

  2. I looked a Rich Uncles a little while ago. They are fairly new and I remember their fees being on the high side. Also, only about a dozen properties in the REIT so far. In their disclosure, they are being investigated by the SEC right now- something about advertising and sales of securities. It may just be nothing but I’d wait until it all shakes out. I believe they are coming out with a new student housing REIT.
    You’ll find NNNs mostly in REITs. There just isn’t enough profit in them for smaller operators to get a decent promote.

  3. What does the taxation structure look like on the Rich Uncles deals? To me, some of the biggest benefits of investing in real estate are related to the tax advantages. I am not familiar with their set up but I would want to figure out how the income would be taxed in that scenario. It becomes more complicated when invested in an entity that then invests in multiple properties. Any of you familiar with this aspect of their offerings?

    • Looks like a non traded REIT. They distribute dividends taxed at your marginal tax rate. Small percentage is tax sheltered because it’s return of capital.

  4. I note that you seem to prefer non-accredited investing. It’s not that difficult for us docs to get certified as accredited, there are online companies that do it from tax returns and pay stubs. I’m about to invest 25000 in a real estate syndicate that pays 15% per year with split of profits after 5 years. The developer has done numerous if these deals and the investors have been getting 30-40% total return on their investments but it is only available if one is accredited.

    • Have you run into sponsors that require certification? I don’t think I’ve seen that. The world of accredited investing seems to offer better returns…if you can manage the risk.

      • Yes an example is (RWN), which allows joining for a $10 monthly fee and has a broad spectrum of investment and networking opportunities. Syndicates include accredited investments and are listed there. I met and shook hands with Kathy Fettke, the founder of RWN, spent several hours studying their materials and viewing videos, and emailed a note of interest, to get on their list of investors. I’m pursuing the Reno project which closes to accredited investors Aug 25. They require a certificate of accreditation and completing a detailed signup process. Then they invite you to provide the funding if accepted. These are not in the public domain. Risk is minimized by gaining confidence in the people and information being offered, and meeting other investors who were successful with past projects by the same people. This should take months or even years depending on your circumstance. Ive been following a couple other similar organizations as well. (You might see how difficult it is to share about this process in a post as a reason why we don’t hear much about them in general).

        • Never heard of that particular network but I will check that out. Technically most of these crowdfunding sites and deals are exclusively for accredited investors, however, they rely mostly on self-reporting. I have to think that will change someday. Over time I’ve been introduced to a good number of syndicators and you’re right, it takes time to vet them out. Sounds like you’re doing great! Thanks for the info…

    • Well, I just want to make sure everyone is exposed to both. Some docs won’t be able to qualify as an accredited investor for quite some time. You’re right though, accredited investor deals are juicier and there are a lot of them out there.

  5. I just tried to sign up at Rich Uncles and it said they are not approved in my state, but other than saying that they really had no explanation for why.

    Do you know what that’s all about?

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