Commercial property newbie

[Marie Hill]

What is your best advice to someone who wants to start investing in commercial property?  Where should they start?

[Alex Roter]

@Marie Hill Office, retail, warehouse, self-storage, and car repair shops are in constant demand--and would be great options to look at. Although more and more and working from home due to COVID, so perhaps office buildings are not so relevant nowadays. 

Try finding properties in metropolitan areas (heavily populated) because your tenant will likely get more business (and less likely to go out of business). Also, there will be more sales activity to help support the property value (through sales comparables) when it comes to financing.

Restaurant properties that are stand-alone (not connected to other buildings) are riskier because restaurant businesses, in general, are difficult to keep afloat. Additionally, due to a stand-alone restaurant property's special-use case, they cannot be used efficiently for anything other than a restaurant. That's why they call it "special-use."

Avoid any property that used to be a gas station or a dry cleaner (on-site cleaning), because mortgage lenders are likely to turndown these loan applications due to environmental issues.