“I Would NEVER Buy a NNN.”(And Why That’s Usually the Wrong Take)
- Elaine Kim
- Apr 27
- 2 min read
This is the mental shift most multifamily owners struggle with.
In apartments, you’re buying:
Units
Rent upside
Management opportunities
In NNN, you’re buying:
A lease
A tenant
A stream of income
The building matters—but not in the same way.
If the tenant is strong and the lease is solid, the investment tends to do exactly what you expect.
If not…that’s when you hear the horror stories.
What Actually Makes a Good NNN Deal
1. The Tenant Has to Make Sense
Not just a recognizable name. A business that:
People use regularly
Holds up in different economic cycles
Has a reason to stay in that exact location
Think boring, not trendy.
The more “essential” the use, the more comfortable I am.
2. The Lease Should Be Doing the Heavy Lifting
A good NNN deal is structured to protect you.
You want to see:
Meaningful lease term remaining
Built-in rent increases (not flat forever)
Options that extend the relationship
Clear responsibility on the tenant
If the lease is weak, you don’t have a passive investment—you have a future problem.
3. Location Still Matters (A Lot)
I don’t care how strong the tenant is—if the location is weak, you’re exposed.
Because eventually, every lease ends.
You want:
Real population nearby
Consistent traffic
Easy access
Surrounding businesses that make sense
If the tenant leaves, you’re back to owning real estate. It needs to stand on its own.
4. Can Someone Else Use the Building?
This is where a lot of deals quietly break.
If the tenant leaves:
Can another operator step in?
Or are you stuck with a hyper-specific buildout no one wants?
The more flexible the property, the lower your risk.
5. “It Went Dark” Usually Has a Backstory
When someone tells me about a bad NNN deal, I always want to know what really happened.
It’s usually one (or more) of these:
Short lease term that was ignored
Weak or unproven tenant
Location that didn’t support the use
No rent growth
Property that was hard to re-lease
That’s not an NNN problem. That’s a selection problem.
The Trade-Off (And Why It’s Not for Everyone)
NNN can be:
Predictable
Low maintenance
Easy to hold
But you’re giving up:
Control
Value-add upside
The ability to “fix” performance the way you can in multifamily
You’re betting on stability, not improvement.
For some owners, that’s exactly the point.For others, it feels too passive.
The Bottom Line
NNN isn’t inherently risky. And it’s not inherently safe either.
It’s selective.
Buy the right one, and it does exactly what you want:
Sends a check
Requires very little from you
Holds value over time
Buy the wrong one, and you’ll have your own “it went dark” story to tell.
So the better question isn’t:
“Would I ever invest in NNN?”
It’s:
“What would a NNN deal have to look like for me to feel good owning it?”
That’s where the real conversation starts.
Additional questions?
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