Property Manager · Calabasas, CA · Member since 2026 · 141 posts · 67 votes
6mo
Been self-managing a mixed commercial portfolio in SoCal for over a decade, so I can speak to this from the operator side rather than the investor side.
Small mixed-use is genuinely interesting right now, but the underwriting headaches are real. The residential units get valued on rent multiples, the commercial space gets valued on NOI/cap rate, and most lenders blend them in ways that don't always work in your favor. You have to underwrite each component separately to really know what you're buying.
The lease structure on the commercial portion matters enormously. A retail ground floor on a gross lease that the owner has been loosely managing is very different from one with NNN or modified gross terms where expenses flow through. I've seen deals look great on paper until you dig into who's actually been paying for HVAC, common area, and roof.
If yields are looking strong in a market, I'd want to know why the commercial tenant(s) are staying — is it a sticky use (medical, service-based) or a discretionary tenant that could churn? That answer changes the risk profile completely.