How Angelo Grogan Builds Wealth with Triple Net Leases (NNN Investing Explained)

Kristen Knapp (01:33)
We’re going to get into absolute triple net deals. I’m really excited. So thanks for being here, Angelo.

Angelo Grogan Webb (01:37)
Well thanks for having me, Chris, and I appreciate it.

Kristen Knapp (01:39)
Yeah, so let’s just jump into your background and tell us a little bit about how you’ve evolved in this industry and landed to where you are today.

Angelo Grogan Webb (01:47)
I started out as a kid. My parents used to have some rental properties, mainly single family and duplexes. you know, obviously I was always riding around with them. I always thought real estate was the coolest thing. But you get to a certain age and you hate riding everywhere. And I always thought to myself, I’m like, why don’t they just buy like apartments? There’s like 20 of them right here. So like kind of early in life, I had this kind of fascination with commercial real estate. So once I was towards the end of college,

about to graduate, actually hopped into multifamily industry. And from there, I started as a part-time leasing agent. When I got out of the multifamily side of things, I was a regional manager over 3,000 units. Then I kind of shifted and went over to our commercial side, which I was always just fascinated with.

And I’ve been on the commercial side, worked with a company that did a lot of development and most of our leases were absolute triple net leases and that’s where I learned more about that strategy and why it’s so powerful.

Kristen Knapp (02:40)
Yeah, and what exactly drew you into commercial? What about it really enticed you?

Angelo Grogan Webb (02:45)
Um, it definitely was an ego thing. I was like, Hey, I would love to be that guy that owns this humongous building and owns that strip mall with all those stores. You know, it definitely was, it was an ego thing back then, you know, just owning stuff and kind of strutting around, um, know,

Kristen Knapp (03:02)
but now you’re that guy, so.

Angelo Grogan Webb (03:04)
Yeah,

something like that. So for me, that was the initial thing, but I’m also just fascinated with development and just having places for people to live, work, community, et cetera. It’s something to something to be about it.

Kristen Knapp (03:19)
Yeah, and do you remember your first big win or turning point where you’re like, I’m really going to be able to do this as a career?

Angelo Grogan Webb (03:26)
Yes, I do and it’s a crazy story. I thought outside the box and I had a leader who welcomed my thinking outside the box because I was the young guy in the company. So everybody else was kind of dinosaurs and they did things the way they did things and here I go like, well, why don’t we just try this? he’s like, hey, try it. Let’s see how it goes. So it was actually a Walgreens. It was a…

a dark Walgreens, which means the lease was still in place and they were still paying the lease but the store had closed down. We were looking at purchasing it and we already had somebody in mind to rent it. Usually it goes to the dollar store or something similar and it was one of the dollar stores. I thought to myself, hey, before we close, why don’t we just try and negotiate a buyout?

of Walgreens lease and see how it goes. So we ended up getting the spot for 2 million and Walgreens did a buyout for 2.1 million. So the company actually made $100,000 to buy the property. Plus, once we bought it, the dollar stores lease went into effect. So we never missed a beat. It was 10-year right away and we made $100,000 at close.

Kristen Knapp (04:35)
And that was early in your career.

Angelo Grogan Webb (04:37)
Yeah, that was actually the first deal that I really was a part of. Like really, you know, it wasn’t the, make sure we have enough copies of this. It was like, I was actually a part of strategy. Yeah, that was the first one. And from there I was like, I’m pretty sure I can do this.

Kristen Knapp (04:51)
Yeah, that’ll make you get into it for sure.

Angelo Grogan Webb (04:53)
And a

pat on the back from the president of the company is always good.

Kristen Knapp (05:44)
Yeah, exactly. Well, yeah, I mean, they had faith in you, which is huge.

Angelo Grogan Webb (05:48)
No, no, % and that does something for your confidence too. When your leaders celebrate you and they have confidence in you and they’re willing to allow you to try new things, right? That’s how we learn and that’s how we grow is we try, you know, fail or succeed. If you fail, you see where you went wrong, you try again. And that’s just how we grow. And you know, all success is built on mountain of failure, right? So having that comfort to try and fail is what really helped me.

Kristen Knapp (06:15)
Absolutely, and can you think about a time where maybe things didn’t go as planned but you learned a big lesson from it?

Angelo Grogan Webb (06:21)
Every deal. Because every deal there’s something. I’ve yet to do a perfect deal. I’ve yet to do a deal that was smooth. Every time I look at one and I don’t see any issues, I know there’s going to be a big issue somewhere that usually comes out of due diligence.

So I would say there’s not necessarily one particular one. I think every deal you learn something new because something pops up that is the roadblock or speed bump and you have to figure it out until you close. It’s always a moving target. And as you get closer, that target gets smaller, smaller, smaller, smaller. You’re just trying to figure things out to help it zone in. And sometimes you have to readjust and once you close, you close.

And then depending on what kind of asset you’re buying, the real world might actually start.

Kristen Knapp (07:04)
Yeah, yeah, but I think it’s good advice because I think a lot of people getting into the real estate investing world just think it’s, you know, a pile of money that gets handed to you. it’s a lot of

Angelo Grogan Webb (07:14)
I would

say for anybody who’s like especially just getting started Understand that it is a lot of work and understand that you are going to be terrified Me personally, I’m a man of faith Your faith will help you a lot if you have a partner or you have a group of friends Who are very supportive. They’re definitely gonna help because it’s terrifying but

Everything we want in our life is just on the other side of fear. So like you have to face it, you have to fight it, you have to get through it if you want to change. Like if you want to change your life, you have to have the courage to get past the fear and take those steps and do it.

Kristen Knapp (07:45)
Absolutely, I agree. That’s very good advice. And then so going into where you’re at today with the absolute triple net deals, and I know you syndicate a lot of deals, just tell us what you’re working on now.

Angelo Grogan Webb (07:55)
So right now the deal that we’re working on is really cool. So it’s actually a suite in an amphitheater.

So we actually are buying the suite and the amphitheater and we’re actually leasing it back to the developer and the amphitheater. So it’s really cool because we own this space and we own it forever. They operate it like any other business will operate a space that they believe that they’re leasing. know, and you know, we’re starting out year one, getting the 10 % cash on cash return and the rent goes up 2 % every year and we have a 15 year lease.

have some downside protection in this deal where at the end of the 15 years we have the option of selling it back to the developer for 1.5 times what we paid for it. Wow. And then we also have a guarantee lease in there so it’s awesome.

Kristen Knapp (08:42)
Wow, that sounds like a great deal. And then how does that benefit the other party? Because I’m sure that that helped them in some way to offload.

Angelo Grogan Webb (08:49)
Yeah, and

it’s actually a deeper strategy for companies. And a lot of them use it to either fund their current project, but often it’s the next project that they use. So a lot of times, in the sales leaseback situation, what you’ll have is you’ll have a company that’s looking to expand, and they want to expand without incurring debt.

some a lot of companies use this model to continue to grow and they want to grow in a way where they’re not incurring more debt, right? So instead of going out and getting a loan from a bank to continue to grow, sometimes they will sell a space or sell a building and lease it back and they use a sales proceeds to go open another location or to continue to grow. And it’s really good because it allows them to

If have a loan and you have debt, you can only write off

your interest. So they can actually write off more by doing the lease.

Kristen Knapp (09:44)
Wow, I would have never thought it that way. That’s a really good breakdown of it. So it’s really a win-win for both parties.

Angelo Grogan Webb (09:50)
No, it definitely is. One of the deals that I did a couple years ago, we did a sales lease back and they did all the tenant improvements themselves. So we bought the building from them. They used those sales proceeds to build out the building completely. And then they used it to go open up two more locations. So instead of having to get three different loans or two different

they just did one transaction and was able to open

in three locations.

Kristen Knapp (10:52)
I’m just always, I mean, I never stop being impressed just with the real estate market. There’s so many creative ways to just leverage your money and your business. And that’s why it’s so important to, you know, talk to people who are so educated in the business and really get that knowledge. Cause I mean, you could be leaving so much money on the table. Cause to me, I would say, it’s better to own. They should just own. But what you said makes so much sense.

Angelo Grogan Webb (11:17)
Yeah, and then you have to remember too, like, they’re not real estate companies. They’re whatever they are. They’re doctor, they’re a dentist, they’re restaurant. They aren’t real estate companies. They don’t want to own the real estate, right? They want to do what they do. we, know, me and people like me, we allow them just to do what they do. You know, they can get to a whole point where they would need a whole other department just to deal with the real estate aspect.

Kristen Knapp (11:38)
Wow, and where do you source these deals from?

Angelo Grogan Webb (11:40)
Mainly from just relationships with brokers and business owners mergers and acquisition companies You know, I’ve been in the industry I always want to say 10 years, but it’s been over 15 years now Not to age myself over 15 years and just having those connections with people in those relationships with people Letting them know what I’m looking for what my strategy is You know a lot of times they bring them to me and like anybody else, you know conferences with like-minded people in general

Thank

Kristen Knapp (12:11)
Yeah, and you’re very diversified in location, right?

Angelo Grogan Webb (12:14)
Midwest and the South mainly. We’ll do anything all over the U.S. If it makes money, it makes sense. If it’s good business, it’s good business. But I primarily really like the Midwest and the South because that’s usually where you’re getting the best returns typically. And a lot of them are usually landlord friendly states. Nothing against my tenant friendly state. But we have a few states that are anti-landlord in my opinion.

So I can deal with a tenant friendly state. So you’ll find a lot of Midwest and the South. But I think that’s where lot of best deals are right now.

Kristen Knapp (12:45)
Why is that so?

Angelo Grogan Webb (12:47)
I think it really comes down to cost of living.

I think they’re more affordable deals. So since that’s just kind of the environment that a lot of cities, especially when you’re talking about Midwest cities like Kansas City, St. Louis, Indianapolis, the plethora of cities in Ohio that are similar. And then across the South, like here in Texas, Houston’s a great market that’s like six markets in one. Same thing, you go to DFW. And then across the Southeast as well. I think the lower,

The lower price of living allows you to get into deals for less money. You can get these assets at a lower price, but the market as far as rents and stuff is still high. So what you’re renting for, whether it’s residential or commercial, is still kinda high, but your purchase price is a little bit lower, because that’s just how things are in the area.

Kristen Knapp (13:33)
Yeah, that makes a lot of sense. And then going to these absolute triple net deals that you do, can you kind of break down just the theory behind those?

Angelo Grogan Webb (13:41)
Yeah, so the theory behind those is making a reality of what people think real estate is. This is really the most passive, know, you know, the absolute triple net and ground leases, which we do do both. That’s as passive as it really gets because with the absolute triple net lease, the tenant is responsible for everything that includes maintenance, insurance, taxes, right? They’re responsible for all those things. And so you’re the the amount of

management is really small to next to nothing honestly so when when you have that it allows you for me I believe in a property being stabilized before you buy the next one now some people have some huge organizations where they have a whole asset management side and property management side I think it’s a little different for them but I think for the most part for most people stabilizing the property before you go buy the next one and in these situations these properties are stabilized the

close so you can continue to scale and you can continue to build up, build up, build up.

Kristen Knapp (14:39)
Wow, so you’ve been able to scale within that pretty quickly.

Angelo Grogan Webb (14:42)
Yeah, it allows me comfortably too. Like I said, I believe in it being stable. As a person who has passive investors, my number one goal is to preserve their capital and then give them a return. So I want to make sure it’s stable. I want to make sure we’re fully fed

fully vet into great due diligence on who the tenant’s going to be and make sure that we have that stability there for them. Because my main focus is helping them grow their money.

somewhere where it’s stable and it’s dependable.

Kristen Knapp (15:50)
Yeah, and I think it’s a good point that, you know, I think a lot of people think of real estate investing as very active and very in the weeds, but there is that passive element to it.

Angelo Grogan Webb (16:00)
Yeah, and it really depends on what asset. I come from the multifamily world. So if you’re going to invest in apartments, be prepared to work. I’m just going let you know. Be prepared to work. Be prepared to work. These grades are not from age and time. They’re from property management. Okay? So be prepared to work your butt off. Is it worth it 100 %? You know, but different assets have different levels of management. Different assets have different expense, like ratios and things like that. And I think the best thing to do is find

one that fits for you. Because I know some people who could not really do the asset that I do because they want to be everyday active with know with tenants and stuff like that and you know I did that for a while so I’m good on it but it really just kind of depends on what kind of asset and personality the person has.

Kristen Knapp (16:45)
Totally, and you were saying how you really value creating stability for your investors. Can you talk about how important stability is over maybe like the really sexy deal that looks really great?

Angelo Grogan Webb (16:58)
Yeah, I think my daughter would yell at me for this, for using this analogy. She’s a Gen Z, I can’t do or say anything. I look at it, I kind of explain it to people for like us guys, you know, like you’re younger and like the girl is kind of crazy. It the thing for women, like the bad boy, right? And it’s like this.

Kristen Knapp (17:07)
You can’t say anything.

Angelo Grogan Webb (17:18)
this craziness about it is really just a dopamine hit and it seems exciting and all of that but then eventually you kind of find out like man it’s just leading me to lot of dead ends right or is it leading me to a lot of bad places where then you find something stable and you find that comfort in it and then you feel comfortable and you feel stronger because you have the confidence to grow and things like that and the support that’s how I feel about real estate there’s a lot of sexy and sizzling deals that you know you hear about and

indicators talk about and they give you this great beautiful picture but in three four five years it’s just not the reality.

right and telling you the potential where I like the stability of the absolute triple net because we know what our NOI is every year right we know okay we have a 2 % to 3 % annual rent escalator in each at each property and we don’t have any expenses if we do then nil right they’re very small so I know what my NOI is in five years right I’m not guessing what taxes will be I’m not in guessing what insurance will be

Right? We don’t have any expenses. So we know where that NOI is. So that allows us to have more of a stable outlook on where we’re going to be and what we’ll be able to sell the property for.

Kristen Knapp (18:31)
Yeah, no, that makes a lot of sense. And for somebody who’s maybe new to investing, you’ve given a lot of great advice in terms of how to start out. But what would be something else? If you can think of anything else, what would you tell people? Or I guess, what do you wish you learned earlier? That’s a better way to

Angelo Grogan Webb (18:49)
I wish I would have learned earlier and truly believed earlier is you don’t have to start small You don’t We have several people that we’ve come across and I’ve come across they have two hundred three hundred thousand dollars and they want to learn about Wholesaling and it blows my mind. I’m like you’re hustling backwards. I knew people wholesale to get money to flip They flip and they’ll flip for properties the fifth one. They’ll hold as a rental They got enough rentals and then they want to do apartments if you

have that kind of money sitting around don’t start back there you have to hit start start it’s big as you can because it’s gonna take the same amount of work a 10,000 a 10 unit apartment complex or a 10 unit retail center is going to require the same amount of work as a hundred units

Right, so if you can do 100, do 100. Like don’t start at 10 when you can do 100. Do 100. And the more units that you have and the bigger the property, typically what’s gonna happen is that property creates enough revenue for you to have management or third party management there. So you’re actually giving yourself less work by buying bigger. But don’t think you have to smarts ball. Go big, go as big as you can initially, because it’s gonna take the same amount of energy and effort.

Kristen Knapp (19:54)
I think that’s great advice. I actually haven’t heard somebody say that. I think that’s really valuable.

Angelo Grogan Webb (19:58)
And it’s the same process. It’s just the added zero. What’s the difference between a million dollar property and a hundred million dollar property? Two zeros. You’re gonna go through the same process, 100%. Everything’s gonna be the same. So you can go do 100 million, go do 100 million.

Kristen Knapp (20:12)
I mean, but I loved how you said how it can actually allow you to actually outsource a lot of the work.

Angelo Grogan Webb (20:18)
Yeah, mean, once a property, especially like if it’s not like an absolute triple net lease type of deal or a triple net lease type of deal, once you have a certain amount of revenue, you know, the property can afford a property manager.

right so you can put somebody there again a third party there you know just make sure you fully vet your third party management make sure that they work in your sub market make sure that they are experts in that asset class because you don’t want to go get you know

A property and you have a management company that specializes in B properties or vice versa, right? Just make sure third party management is the right fit for your property and your market. But if your property can afford it, that allows you to time. That’s when it allows you to have more of that time and you can move more at a time with, for me, I think for most of us, most of us want to spend more time doing what the heck we want to do.

And a lot of us, it’s with family or somebody we love or the people that are closest to us just because we don’t get that time back. You can use that time to spend more time with them or you can spend that time doing what makes you money, which is finding the next deal and finding more deals.

Kristen Knapp (21:19)
Definitely, and I think that that’s why a lot of people get into the business. They want the freedom, but maybe they find themselves not having it.

Angelo Grogan Webb (21:27)
Right, yo, you can quickly buy a job. You can.

You can quickly buy a job. So I think that also comes down to people understanding their strategy, what they want to do and what their ultimate goal is. Because if you want to get in and hey, I want passive income, there’s certain type of properties you want to look for. You don’t want to look for a value add or a reposition if you want your time, because that’s going to take a lot of time to stabilize. So I think people have to have a really clear goal on what they want to do and what they want out of it. And from there, draw the map on how to get there.

Kristen Knapp (21:58)
Yeah, like make your own journey.

Angelo Grogan Webb (22:00)
Oh, 100%.

But I forgot who says it. It’s very popular. Begin with the end in mind. So know where you want to go and then figure out how you want to get there. Like one strategy I always use is, OK, this doesn’t seem possible, but what if it was? How will we do that? How will we get there? Right. So instead of looking at something saying it’s impossible walking away, it’s like, if we could do it, how would we do it? And then you figure out how to do it.

Kristen Knapp (22:25)
Yeah, yeah, I mean you’re giving such good advice for people starting out in the industry. I think it’s really valuable. So what’s next for you?

Angelo Grogan Webb (22:31)
thank you, thank you.

For me, it’s just to continue to grow. Continue to bring people in who are looking to passively invest. They want to grow their money. Especially people who want to grow their retirement. That’s something that’s really dear to me. My father, 40 years, blue collar, all American dude, It wasn’t uncommon for him to work a double two days in a row. He’d come home, drink his tall can, and watch baseball.

was in grills of me. Like my dad was like the epitome of the American dream, right? When he retired, I didn’t know how much money he make. He didn’t talk about money. Again, very, very, very traditional man, right? But unfortunately we lost him to cancer last year. And as that time was coming, you you have to do certain things and.

I was able to see how much he was getting paid from his retirement. And for me, he worked 40 years, 30 years in the same union. And he was only getting like $1,400 a month. And to me, it was infuriating because I felt like the person who was most important to me in life, especially man, important to me in life, is my father.

was taken advantage of, like all the time and sacrifice that he made for myself, my brother, my family, you know, even his grandkids, right, our kids. And that’s all he was worth to them. You know, and to me, I was like, I want to be the option for people so where they can grow and help them retire successfully. 90 % of people in America fail to retire successfully. And that’s an number. That is an amazing number.

Right, so I want to just make sure that I have deals and I’m allowing access to people. That’s one thing that I really take pride into. All of myself is 506B, which means I accept accredited and non-accredited investors. Because most people in America are non-accredited. You know, so I wanted to make sure I have the access for those people as well.

But that’s my goal is just to help as many people as I can help grow their money safely, protect their initial investment and grow it in a safe manner and help as many people as I can.

Kristen Knapp (24:25)
Yes, I love it. And so how can people reach you? How can people work with you?

Angelo Grogan Webb (24:28)
man, thank you, I’m happy you said that. I don’t have like my social media stuff. I don’t know if you can share it or possibly share it. So my current website is under construction, but people can follow me on LinkedIn or on Instagram. Social media is probably the best way to find me.

So on Instagram, I’m Angelo underscore CRE. And then on LinkedIn is just Angelo Grogan Web. And also my company, Grogan Capital is on LinkedIn as well.

Kristen Knapp (24:57)
Awesome. Well, everybody please check that out. And thank you so much, Angelo. This has been awesome. You’ve been so inspiring. And I think a lot of people got a lot out of it.

Angelo Grogan Webb (25:04)
Thank you, Chris. It was great to be here. I’m happy to share my story. Hopefully, somebody can take some nuggets from this, or if anything, keep it as motivation and faith to take the steps to improve their life or start working towards those goals they set for themselves.

Kristen Knapp (25:20)
Definitely. I think a lot of people will get value from it. So thank you again and everybody subscribe to this podcast if you loved it and we’ll see you next time. Thank you.

Angelo Grogan Webb (25:28)
Thank you. Bye, guys.