Commercial Property Due Diligence Checklist

2 Replies

I am looking for some educational materials (articles, forums, checklists, podcasts, etc.) specifically from those of you who specialize in commercial property. My background is in single family properties and we are about to lock down our first 7 unit, single story, commercial property. I want to have all my ducks in a row. Thanks a ton! 

I'd recommend listening to as many of the BP episodes that deal with smaller apartments. You'll gain a lot of insight there and some real world war stories as to what has gone well and what hasn't.

At a very high level, you're going to want to focus on NOI (net operating income). With more units, your ability to maximize cash flow and returns is greater than a SFR. For example, if all units are not separately metered for water, that's a great opportunity to separately meter them and charge that back to the tenant (if that's not currently being done). You'll also want to pay attention to market rents. Are you under or over charging tenants, now to the tune of x7. Even a $10 increase each year on 7 units will compound over time,