What is a Single Tenant Net Lease (STNL) property?

In a STNL property, the tenant is responsible for paying rent as well as all operating expenses such as property taxes, insurance, and maintenance costs. The tenant typically signs a long-term lease, usually 10-15 years or more, which provides a stable income stream for the property owner. The lease agreement typically includes a rent escalation clause, with allows the rent to increase over time, usually at a fixed percentage rate, providing additional income growth. 

Are Single Tenant Net Lease (STNL) properties risky?

STNL properties are often viewed as a lower-risk investment option because of the long-term lease agreements with established tenants. These tenants are often well-known, national or regional companies with a strong credit rating, which further mitigates risk. Additionally, the lease agreement may include renewal options, providing continuity of income for the property owner.

What are the risks of owning a Single Tenant Net Lease (STNL) property?

Investors is STNL properties typically enjoy a hands-off investment experience, as the tenant is responsible for most of the property expenses and maintenance. However, it is important to conduct thorough due diligence on the tenant, lease agreement, and property condition before investing, as these factors can greatly impact the investment's performance. As with any investment, there are still risks associated with STNL properties, including tenant default or bankruptcy, changes in the real estate market, and changes in the surrounding community that could impact the property's value or performance.

Why are express car wash properties a popular Single Tenant Net Lease (STNL) investment option?

There are many factors that make express car washes a popular investment option for those looking to generate steady income and increase their wealth over time. 

Predictable revenue is one of the key advantages of investing in an express car wash. Since cars need to be cleaned regularly to maintain their appearance and value, car washes typically generate a steady stream of income. This is especially true for express car washes, which offer a fast and convenient service that encourages customers to come back on a regular basis.

Additionally, many express car washes offer membership programs that provide customers with unlimited car washes for a set fee each month. These programs can be a win-win for both customers and investors. Customers benefit from the convenience of being able to wash their car as often as they like without having to pay each time, while investors benefit from a steady stream of predictable monthly revenue.

Membership programs can also help to improve customer loyalty and retention, as customers are more likely to continue using a car wash that offers a convenient and cost-effective solution for keeping their vehicle clean. By offering a range of membership options and benefits, express car washes can also encourage customers to upgrade to higher-tier memberships, which can help to increase revenue even further.

In summary, predictable revenue and membership programs are two important factors that make express car washes a popular investment option. By providing a fast and convenient service that encourages repeat business and offering membership programs that provide predictable monthly revenue, express car washes can help investors to generate a steady stream of income over the long-term.

Are investments in Single Tenant Net Lease (STNL) insured?

Investments in STNL properties are not FDIC insured, are not bank guaranteed and may lose value. Many factors, including unpredictable economic conditions, may cause actual results to vary materially from projected targets and there are no assurances that the results will be obtained. Investing in STNL properties or any alternative real estate investment involves risks and the potential of losing money.

What is an "Accredited Investor?"

Investors wishing to enter private equity funds, such as a Kodiak Car Wash Fund I, must meet specific benchmarks outline in Rule 506(c) of the Security Exchange Acts (SEA).  Becoming an accredited investor opens up a wide range of lucrative opportunities for higher net worth and investment-savvy individuals. The simplest way to attain "accredited investor" status is to ask for a 3rd party verification letter from a registered broker dealer, an attorney or a certified public accountant. 

How does investing in a Kodiak Single Tenant Net Lease (STNL) fund work?

Kodiak STNL Funds are designed much like other private equity funds, however; our funds have low management fees and no carried interest. Raising a private equity fund requires two groups of people:

1. Financial Sponsor - The team of individuals that will identify, execute and manage the STNL properties that are owned by the Fund. The sponsor is generally comprised of a General Partner and a Management Company. The General Partner is the entity with the legal authority to make decisions for the Fund and who assumes all legal liability. The Management Company is the operating entity that is responsible for allocating capital and managing the back office as well as investor relationships.

2. Investors - The individuals that will provide the capital to make the STNL investments. Investors are often referred to as Limited Partners because their liability within the legal entity, typically a LLC, is limited to the amount that they invest. In raising a Fund, the fund Sponsor will reach out to perspective investors and provide Fund documentation in the form of a Private Placement Memorandum which outlines the mandates of the Fund, the fund terms, the fees and expenses of the fund, and the economic relationship between the General Partner and the Limited Partners or how each makes money through the STNL investment.