Upgrading from Residential Multi-Family to Commercial Multi-Family

[Larswin Mendoza]

It's a long shot at this point, but I currently own a 4-unit bldg here in San Diego, and am working on a possible 1031 exchange into a 14-unit building also here in San Diego.

Aside from the obvious differences in scale and financing, are there any laws, pitfalls, difficulties, etc that arise from owning commercial that aren't present with residential multi-family, particularly as it pertains to the People's Republic of California?

I'm new here and don't have much time to peruse the forum, but if this has been brought up before, can someone point out a link? Thanks in advance.

[Doug McLeod]

Check the blogs and forums on MF and Apartment investing  

[Garrick Oconnell]

@Larswin Mendoza

ADA code requirements will be completely different from residential. 

ADA codes primarily effect multi housing only at the office and pubic areas. 

In cemmercial especially when taking new ownership or if you plan to make any changes to the new building will be a substantial difference. 

Ask the seller if the property is ADA compliant, has it been CASp certified (ask to see certificate).

If the property houses medical anything then it is imperative that you make sure it is ADA compliant, because the level of compliance required is much higher. 

[Brian Burke]

@Larswin Mendoza, you should check local laws because some municipalities have specific limitations such as rent control or prohibitions against smoking on the property.  Since its only 14 units you're in luck because anything over 15 units in CA has to have a "responsible person" (i.e. manager) on-site.