Is the income stream quoted accurate?
Yes. When you purchase a Millcreek Commercial Property you get your portion of the guaranteed lease stream. So, if a property is producing a 6% income stream and you purchase 10% of that property you will receive 10% of that income stream, thus a 6% return on your investment. Additionally, you also receive 10% of the tax benefits, and market appreciation.
Are there any hidden costs?
Commercial tenants in a triple net lease pay most all anticipated expenses including property taxes, insurance, utilities, and regular maintenance. Some unforeseen long term costs such as roof and structure may remain with the landlord and vary by property check your due diligence package. The only anticipated costs to you is the charge for the lease administrator to send your 1099 anually. This fee charged by the lease administrator is $35/year.
If needed, how can I exit from a property that I co-own?
Should you need or want to sell the interest in a commercial property that you own you would first provide first right of refusal to any co-owner in the same property. If nobody in said property is looking to purchase, we would then reach out to the Millcreek Commercial co-owners to provide them with the option to purchase. The third and final option is to list the Tenant In Common interest on our site and other affiliate sites to help you sell your interest.
What does “Investment Grade Guarantee” really mean?
The term “Investment Grade Guarantee” refers to the credit rating of the corporation that has guaranteed the lease. In some instances that is the same company that is occupying the space. Often, we secure a guarantee from a parent company that may own multiple related brands or companies. By having an investment grade guarantee a company with a high-quality credit rating has guaranteed your payment. These companies can issue investment grade bonds that trade as commercial bonds on Wall Street. The default rates by these companies are very low. Even in the worst economic downturn in recent memory 2008 and 2009 the annual cumulative default rate for investment grade bonds did not even approach one half of one percent. Since 2010 (2015 was the last year of reporting when this was written) there has not been an investment grade bond default anywhere in the world.
Who manages the property?
We have arranged for a company with extensive experience in property management to manage your real estate. This company works to provide the safety, security, and stability that is expected by each Millcreek Commercial co-owner. The property management company can be changed at any time by a majority vote of the owners.
What is the exit strategy?
Each co-owner has a separate deeded interest in the property and can buy and sell their interests as real estate independent of other owners. Every NNN leased investment, whether purchased as a Tenant In Common or as the sole owner, should be purchased as part of a long term investment strategy. But, as Robert Burns wrote, even “the best laid plans… can go awry”. Because Millcreek Commercial Properties keeps minimums low and markets to middle class retirement investors we anticipate securing multiple retirement account investors in our properties. These investors have been coached to utilize a roll-up strategy whereby they leave their cash in their retirement account and compound their investment when additional shares of their investment property become available. There are no minimums on exchanges within a property.
Millcreek will facilitate these deed modifications and charge no marketing fees. If after your shares are offered to your partners and you still have a portion of your investment left to sell on the open market. Millcreel will market your property on our sales platform for a discounted listing fee of 3%. We are committed to maintaining the best resale program in the industry.
Can I identify a Millcreek Commercial property as a replacement property in my 1031 exchange?
Yes, Millcreek Commercial provides the perfect 1031 exchange solution for small investors or for left over funds (boot) from larger exchanges. Because you can choose the exact amount to purchase you can cover the precise amount of your relinquished property. We are not CPAs or Attorneys. We urge you to seek consel from qualified advisors on all tax and investment issues.
Can self-directed retirement account funds be used to purchase a Millcreek property?
Yes, because we only sell 100% debt free properties our products are able to be placed in self-directed IRAs or 401Ks.
How is a typical IRA converted into a self-directed account?
We work with multiple national high-quality Retirement Account fiduciaries that will assist you in transferring your funds to a self-directed account.
How is a purchase executed?
Every Millcreek Commercial transaction is treated with the same care and attention to detail that would occur in a typical $10 million commercial investment real estate transaction. After you have reviewed the Offering Memorandum and decided to proceed we enter into a Purchase and Sale Agreement. Once the property is under contract all the detailed source documents that are referenced in the Offering Memorandum are made available for your review. Once you are confident you want to proceed we make an appointment for you with Old Republic Title. We have associated with this national title company to provide title insurance (at our costs) and reduced administrative fees shared by us. Because our properties are debt free you have very few documents to sign. Outside of the Purchase and Sale Agreement you will also be required to sign a Tenant In Common agreement that sets forth your relationship with the other owners and a Lease Administration Agreement.
How long does the purchase process take?
Once you decide you want to purchase ownership in a Millcreek Commercial Property, the closing can occur the next day. Your specific appointment will take about 30 minutes.
Who makes decisions about the property?
You, and the other owners make the decisions. Their communication is facilitated by the management company. Because there is a long term, NNN lease in place when you purchase, there are, in practice very few decisions to be made. The executed tenant-in-common agreement at closing outlines the relationship among the co-owners and how decisions are to be made.
What happens if the tenant defaults and files bankruptcy?
Because Millcreek Commercial typically invests in properties that have Investment Grade Guarantees, default rates are virtually non-existent. However, in the case of a catastrophic failure of both the tenant and guarantor your income stream would be interrupted. Because there is no debt on the property there is no risk of a lender foreclosure.