Any big differences between Residential and Commercial investing?

Question

Looking to expand my portfolio a bit into the commercial space.

Besides actual lease terms, anyone know of any big differences between landlording/managing residential versus commercial spaces?

looking to see who has done both and what things to look out for.

Greg Dickerson · Answer

They are completely different in every way from acquisition, due diligence, financing and management. A good place to start if by talking with Brokers selling the type of properties you're interested in as well as management companies and lenders. They will be able to offer a lot of things to look out for and what you need to know gong in.

Patricia Steiner · Answer

I own both and they are different in many ways.  First you need to define "commercial."  Are you talking five or more residential units - or a building, strip center, office complex? All are operated differently as an owner/landlord and the financing is different as well.  Also know that during economic downturns, residential is a stronger performer.  Do your homework...here's a good summary to start you off:

https://investorjunkie.com/real-estate/commercial-vs-residential-real-estate-investing/Hope this helps...

Ronald Rohde · Answer

I think you need to start with a budget, how much equity are you putting down and reserves? You need to identify your team as the lawyers, accountants, lenders, PM are all much more important in CRE.

Robert Lee · Answer

Thank you @Greg Dickerson and @Patricia Steiner!! Looks like I have some good places to start research.

Robert Lee · Answer

@Patricia Steiner Thank you :). We are looking to purchase warehouses and/or commercial spaces for businesses mainly (single or multi offices).  Sounds like a great place to start.  Any other books or reading anyone has Id love to see!

Any big differences between Residential and Commercial investing?

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