Moving from Residential to Commercial RE (NE Florida)
Most Popular Reply
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
2moIt varies based on what you are trying to do an age in life.
I have clients from 7 to 9 figures that are individuals and I am high net worth myself. Most investors once they hit millions to tens of millions or higher in net worth they start switching to more passive investments like NNN what I have been doing for 22 years so far.
If you are younger and still scaling wealth and want to grind for headaches then more value add commercial that takes up a bunch of your time might be the answer.
My investors tend to make 500k and up into the millions per year already off of their jobs, businesses, investments so making the most money number 3 or 4 on the list instead of number 1. Number 1 typically is to have investment passive 2. To have big tax depreciation so they give as little money tot he government as possible 3. Stability to the cash flow with long term lease 4. The actual returns of the cash flow starting out and projected over the hold period.
If you are buying smaller properties in commercial like 1 or 2 million try to stick to more areas you live in and know because usually will be more mom and pop tenants in nature and not investment grade tenants in strong areas.
Good luck
15 Replies
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes2mo
It varies based on what you are trying to do an age in life.
I have clients from 7 to 9 figures that are individuals and I am high net worth myself. Most investors once they hit millions to tens of millions or higher in net worth they start switching to more passive investments like NNN what I have been doing for 22 years so far.
If you are younger and still scaling wealth and want to grind for headaches then more value add commercial that takes up a bunch of your time might be the answer.
My investors tend to make 500k and up into the millions per year already off of their jobs, businesses, investments so making the most money number 3 or 4 on the list instead of number 1. Number 1 typically is to have investment passive 2. To have big tax depreciation so they give as little money tot he government as possible 3. Stability to the cash flow with long term lease 4. The actual returns of the cash flow starting out and projected over the hold period.
If you are buying smaller properties in commercial like 1 or 2 million try to stick to more areas you live in and know because usually will be more mom and pop tenants in nature and not investment grade tenants in strong areas.
Good luck
- 2moRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
Need to pick a very specific asset class. The narrower the focus the faster you can become an expert. Expertise is needed to build confidence and to buy a good deal
- 2moJaycee GreenePro MemberReal Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
Quote from @Vicki X.:
Hey everyone, I've spent the last few years investing in and managing residential properties. I'm ready to make the leap into commercial real estate, but I'm looking for the best entry point. What paths do you recommend for someone making this transition? I'd love to hear your advice and any "lessons learned" or warnings you have!
Hi @Vicki X. When you say you want to move into "Commercial RE", do you mean you want to acquire residential properties with 5+ units or acquire properties where the tenants are businesses?
- Investor · Member since 2022 · 186 posts · 155 votes2moThank you for your reply. The latter. I'm more interested in small retail, industrial etc.
Quote from @Jaycee Greene:
Quote from @Vicki X.:
Hey everyone, I've spent the last few years investing in and managing residential properties. I'm ready to make the leap into commercial real estate, but I'm looking for the best entry point. What paths do you recommend for someone making this transition? I'd love to hear your advice and any "lessons learned" or warnings you have!
Hi @Vicki X. When you say you want to move into "Commercial RE", do you mean you want to acquire residential properties with 5+ units or acquire properties where the tenants are businesses?
- 2moJaycee GreenePro MemberReal Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
Quote from @Vicki X.:
Thank you for your reply. The latter. I'm more interested in small retail, industrial etc.Quote from @Jaycee Greene:
Quote from @Vicki X.:
Hey everyone, I've spent the last few years investing in and managing residential properties. I'm ready to make the leap into commercial real estate, but I'm looking for the best entry point. What paths do you recommend for someone making this transition? I'd love to hear your advice and any "lessons learned" or warnings you have!
Hi @Vicki X. When you say you want to move into "Commercial RE", do you mean you want to acquire residential properties with 5+ units or acquire properties where the tenants are businesses?
Great, @Vicki X.. Have you looked into the financing options for such a property? Lenders for retail and industrial properties often have very different underwriting policies than for residential properties.
- 2moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Vicki X.:
Hey everyone, I've spent the last few years investing in and managing residential properties. I'm ready to make the leap into commercial real estate, but I'm looking for the best entry point. What paths do you recommend for someone making this transition? I'd love to hear your advice and any "lessons learned" or warnings you have!
@Vicki X.
That's an exciting next step. One thing that helped many investors make the transition is starting with a commercial asset they already understand, such as a small multifamily or mixed-use property, before moving into more specialized asset classes. I'd also spend plenty of time reviewing rent rolls, operating statements, and lease structures since those become much more important than they are with residential investments. Best of luck with the transition! - 2moJ CastroBusiness MemberLender · Florida · Member since 2025 · 684 posts · 246 votes
That's a great next step. Many investors naturally progress from residential to commercial once they're looking to scale their portfolios and diversify their income.
One lesson I hear repeatedly is don't think of commercial properties as "larger residential deals." The underwriting, due diligence, and valuation process is very different. Commercial properties are often valued based on the income they produce, so understanding metrics like NOI (Net Operating Income), DSCR (Debt Service Coverage Ratio), occupancy, lease structures, and tenant quality becomes essential.
If I were making the transition, I'd consider starting with:
- Small retail centers
- Office condos
- Mixed-use buildings
- Flex/industrial properties
- Smaller multifamily properties (5+ units)
These can provide a manageable learning curve while exposing you to commercial underwriting and operations.
A few lessons I've learned from working with commercial investors:
✔ Build a team early—a commercial broker, lender, CPA, attorney, and property manager who specialize in commercial assets can save you from costly mistakes.
✔ Read every lease carefully. In commercial real estate, the lease can be just as valuable as the building itself.
✔ Don't underestimate due diligence. Review tenant history, rent rolls, operating expenses, deferred maintenance, zoning, and local market demand before closing.
✔ Have your financing lined up before making offers. Commercial opportunities often move quickly, and sellers appreciate buyers who already have a financing strategy.
Northeast Florida has seen steady growth over the past several years, and markets around Jacksonville continue to attract businesses and residents, creating opportunities across several commercial asset classes.
Best of luck with the transition! Commercial investing definitely has a learning curve, but it can be a rewarding way to build long-term wealth. What asset class are you most interested in—retail, industrial, office, mixed-use, or multifamily?
- Investor · Member since 2022 · 186 posts · 155 votes2mo
Quote from @J Castro:
That's a great next step. Many investors naturally progress from residential to commercial once they're looking to scale their portfolios and diversify their income.
One lesson I hear repeatedly is don't think of commercial properties as "larger residential deals." The underwriting, due diligence, and valuation process is very different. Commercial properties are often valued based on the income they produce, so understanding metrics like NOI (Net Operating Income), DSCR (Debt Service Coverage Ratio), occupancy, lease structures, and tenant quality becomes essential.
If I were making the transition, I'd consider starting with:
- Small retail centers
- Office condos
- Mixed-use buildings
- Flex/industrial properties
- Smaller multifamily properties (5+ units)
These can provide a manageable learning curve while exposing you to commercial underwriting and operations.
A few lessons I've learned from working with commercial investors:
✔ Build a team early—a commercial broker, lender, CPA, attorney, and property manager who specialize in commercial assets can save you from costly mistakes.
✔ Read every lease carefully. In commercial real estate, the lease can be just as valuable as the building itself.
✔ Don't underestimate due diligence. Review tenant history, rent rolls, operating expenses, deferred maintenance, zoning, and local market demand before closing.
✔ Have your financing lined up before making offers. Commercial opportunities often move quickly, and sellers appreciate buyers who already have a financing strategy.
Northeast Florida has seen steady growth over the past several years, and markets around Jacksonville continue to attract businesses and residents, creating opportunities across several commercial asset classes.
Best of luck with the transition! Commercial investing definitely has a learning curve, but it can be a rewarding way to build long-term wealth. What asset class are you most interested in—retail, industrial, office, mixed-use, or multifamily?
Thank you for your advice. I'm more interested in small retail, industrial, office. Still need to figure out the specialized sector.
I wonder if participating in the business, either in commercial leasing or transactions, myself would help me build expertise and deal flow since I have the time. - 2moJ CastroBusiness MemberLender · Florida · Member since 2025 · 684 posts · 246 votes
Quote from @Vicki X.:
Quote from @J Castro:
That's a great next step. Many investors naturally progress from residential to commercial once they're looking to scale their portfolios and diversify their income.
One lesson I hear repeatedly is don't think of commercial properties as "larger residential deals." The underwriting, due diligence, and valuation process is very different. Commercial properties are often valued based on the income they produce, so understanding metrics like NOI (Net Operating Income), DSCR (Debt Service Coverage Ratio), occupancy, lease structures, and tenant quality becomes essential.
If I were making the transition, I'd consider starting with:
- Small retail centers
- Office condos
- Mixed-use buildings
- Flex/industrial properties
- Smaller multifamily properties (5+ units)
These can provide a manageable learning curve while exposing you to commercial underwriting and operations.
A few lessons I've learned from working with commercial investors:
✔ Build a team early—a commercial broker, lender, CPA, attorney, and property manager who specialize in commercial assets can save you from costly mistakes.
✔ Read every lease carefully. In commercial real estate, the lease can be just as valuable as the building itself.
✔ Don't underestimate due diligence. Review tenant history, rent rolls, operating expenses, deferred maintenance, zoning, and local market demand before closing.
✔ Have your financing lined up before making offers. Commercial opportunities often move quickly, and sellers appreciate buyers who already have a financing strategy.
Northeast Florida has seen steady growth over the past several years, and markets around Jacksonville continue to attract businesses and residents, creating opportunities across several commercial asset classes.
Best of luck with the transition! Commercial investing definitely has a learning curve, but it can be a rewarding way to build long-term wealth. What asset class are you most interested in—retail, industrial, office, mixed-use, or multifamily?
Thank you for your advice. I'm more interested in small retail, industrial, office. Still need to figure out the specialized sector.
I wonder if participating in the business, either in commercial leasing or transactions, myself would help me build expertise and deal flow since I have the time.I think that's a smart approach. There's no substitute for being involved in actual transactions if your goal is to build long-term expertise.
Working in commercial leasing or investment sales would expose you to market rents, lease structures, tenant demand, underwriting, cap rates, and negotiations—all of which can make you a much stronger investor. It also naturally expands your network of brokers, owners, lenders, developers, and tenants, which often leads to off-market opportunities before they hit the market.
Small retail, industrial, and office each have their own learning curve, so spending time in one niche can help you identify where your interests and strengths align. Over time, that specialization can become a competitive advantage.
From a lender's perspective, I can tell you that the investors who consistently find the best opportunities are usually the ones who are active in the market every day—not just analyzing deals from the sidelines.
- 2moHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP. Couple steps to narrow down your approach.
1. Finance- don't answer. How much money do you have available? Say $100,000. What type of financing will you use? SBA 10% down, Commercial 25% down. These will determine your Deal size. $100,000 at 25% or a $400,000 deal size not including cushion. Or $100,000 at 10% down or $1mm deal.
2. Value Add or Cash Flow- Don't answer. Where are you on your Wealth buildup? If your still building wealth, then more Value Add than Cash Flow possibly. Look for Value Add projects versus $200 per door per month deals.
3. Risk Tolerance- you will be learning and making mistakes the newer the REI type is. Determine your risk tolerance. My first deal I was okay losing up to $50,000 as an example. Structure and identify your deals around that.
4. Skill sets, what do you bring to the table? Where do you want to go? Looks like you have background in Residential. Also, Tech background in residential. Your best Commercial move would be into MFH based on your current skillsets. But looks like your more interested in nonresidential commercial. The value in Commercial is the tenant or business and not so much the actual property. With your background can you bring in or start tenants for the property?
5. Geographics- Northeast Florida? I'll use Jacksonville as an example. There are a ton of Commercial properties available for sale in Jacksonville. I would also check out Property taxes, sinkholes, flooding, and Insurance (hurricanes) as being key parts to your search.
6. Deal Analysis- I would pick out one or two types of REI strategies. Do Deal Analysis on them, in your market, say Jacksonville. Make posts on here for feedback. Keep doing deal analysis until you start to feel comfortable and have built checklists and Deal analysis worksheets. Make your Errors on paper first.
7. Developer or Investor? How much effort and personal investment do you want to bring to the deal? We are Developers of Self Storage and Country Subdivision Lots (not the houses). We like NASTY properties or situations. I would look for properties that have been listed for a while, Odd shaped properties, cleanup properties, Wrong size, etc. as a Developer. If you are an Investor, you don't want any of the above. Worst case is a quick ReHab such as a Daycare, Flatroof church, old Elementary building, etc into Housing. This is still developing to a degree. But otherwise, you're out there competing with everyone else that wants a 4-to-10-unit MFH, or 3/2 flip. Again, are you looking for Value Add creation or $200 per door per month.
Start small and Make Your Big Mistakes Early.
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes2mo
@Vicki X., I agree with the J Castro. Get your license and work for a retail or industrial group like CBRE, Cushman, Colliers, etc.
Unlike apartments, not everyone needs to open a business, so you need to know what tenants are looking for first and foremost. I focus on retail, and there are reasons you will see a strip center on one side of the road full, while the one across the street is nearly empty.
Visibility, access, traffic patterns (i.e. going home vs going to work side of road), parking counts, etc.
In industrial, bays, clear height, parking maneuverability, access to key infrastructure, etc.
There is a lot more nuance in commercial than residential. - Lender · Phoenix, AZ · Member since 2026 · 55 posts · 17 votes1mo
Coming from residential, I'd resist the temptation to jump into commercial by simply looking for a bigger property. I'd start with an asset class you understand and learn how the income, expenses, leases, NOI, DSCR, valuation, and financing work together.
Multifamily or smaller mixed-use properties can be a natural bridge because some of the fundamentals will feel familiar, while still teaching you how commercial properties are evaluated.
One of the biggest differences I’ve seen is that the property itself becomes a much bigger part of the underwriting conversation. You’re not only evaluating the borrower, you’re evaluating the strength and sustainability of the income-producing asset.
My biggest advice would be to build your team early: a good CRE broker, lender, attorney, insurance professional, and other experienced investors. Then start analyzing deals before you're ready to buy. The more deals you underwrite, the easier it becomes to recognize what actually makes a commercial opportunity attractive.
And don’t feel like you need to understand every commercial property type. Pick a lane, learn it well, and expand from there.
- Investor · Hendersonville, NC · Member since 2016 · 498 posts · 285 votes1mo
My background is mobile home parks, self-storage, smaller commercial, and some residential, and the best advice I’d give is to pick one lane and underwrite a lot of deals before trying to buy. The residential experience helps, but commercial punishes vague assumptions pretty painfully. I’d also think hard about whether you want to be an active operator or more of a capital partner alongside someone with asset-specific experience. Those are very different paths, and the right first deal depends a lot on which role you actually want.
- 1moMichael K GallagherBusiness MemberReal Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
it will feel familiar to just get into multi family because there is lots of crossover, however, I'd make sure to consider other asset classes, regardless of if you are purchasing or planning to work in the field somehow, there are many assets and specialties and you may find something interests you in the NNN world that ends up being better than multifamily for you.
- Jacksonville, FL · Member since 2026 · 9 posts · 5 votes1mo
@Vicki X.
When it comes to acquiring a new skill set in this market, I’m a big believer in keeping one foot on solid ground while you pivot. If I were in your shoes, I’d look specifically at mixed-use multifamily opportunities—properties zoned for both residential and commercial. It’s essentially a 'two-for-one' play where you can balance the stability of residential units with the higher-yield potential of commercial space. I’ve seen this strategy executed brilliantly in areas like Riverside here in Jacksonville, FL. It’s a proven way to diversify your risk within a single asset while you learn the ropes of the commercial side. Definitely worth a look!
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