Exchange Analysis
Prepared for Christine Luu | 4307 Whitsett Ave, Studio City, CA 91604
Based on 2025 actual operating expenses, including Christine's current property tax basis (~$30,819/yr). These figures reflect what you are actually earning today — not what a buyer would underwrite at purchase.
Unlevered (No Loan)
| Effective Gross Income | $542,802 |
| Total Operating Expenses | ($175,069) |
| Net Operating Income | $367,733 |
| Market Value (BOV) | $6,700,000 |
| Unlevered Yield | 5.49% |
| Active management | 16 tenants | Your time & attention required |
Levered — With $2M Loan (I/O)
| Net Operating Income | $367,733 |
| Annual Debt Service (I/O @ 5.90%) | ($118,000) |
| Annual Cash Flow | $249,733 |
| Your Equity ($6.7M − $2M loan) | $4,700,000 |
| Return on Equity (ROE) | 5.31% |
| Loan assumed interest-only | Confirm terms with lender |
Cash Proceeds After Closing Costs + Loan Payoff
$6,700,000 BOV | $593,620 total closing costs | $2,000,000 loan payoff | See net-proceeds.html for full detail
$4,106,380
This equity is available to deploy into a 1031 exchange within 45 days of close (identified) / 180 days (acquired). A 1031 exchange defers capital gains tax — your equity works for you at full value, not reduced by taxes.
Deploying all $4,106,380 into a triple-net (NNN) property all-cash — no debt, no management, no 3 AM calls. Annual income at various NNN cap rates:
| NNN Cap Rate |
Annual Income |
Monthly Income |
Management Required |
Typical Lease Term |
| 5.00% | $205,319 | $17,110 | None | 10–20 years |
| 5.50% | $225,851 | $18,821 | None | 10–20 years |
| 6.00% | $246,383 | $20,532 | None | 10–20 years |
| 6.50% | $266,915 | $22,243 | None | 10–20 years |
What is a Triple-Net (NNN) Property?
In a NNN lease, the tenant — not you — pays property taxes, insurance, and maintenance. You receive a net check every month. No repairs, no vacancies to fill, no rent collection calls. Tenants are typically investment-grade national companies: Walgreens, Dollar General, AutoZone, O'Reilly Auto Parts, Starbucks, or fast-food chains. Leases run 10–20 years with built-in rent bumps.
The comparison: Today your $4.7M in equity earns a 5.31% ROE — with 16 tenants, active management, and maintenance exposure. A NNN exchange at a 5.5% cap earns $225,851/yr passively. You give up a small amount of yield; you gain your time back entirely.
Morgan Wetmore | Associate Investments | (818) 212-2724 | Morgan.Wetmore@marcusmillichap.com | CA 02209935
Glen Scher | Senior Managing Director | (818) 212-2808 | Glen.Scher@marcusmillichap.com | CA 01962976
Filip Niculete | Senior Managing Director | (818) 212-2748 | Filip.Niculete@marcusmillichap.com | CA 01905352