Commercial vs. Residential Real Estate Differences in Rules

1 Reply

Hello, I am relatively new to Real Estate investing, with 1 single family and 1 duplex. I would love to take advantage of the economies of scale with an apartment complex (maybe 5-20 units). 

I feel pretty comfortable about the entire process of purchasing, rehabbing, and renting out 1-4 family residential, but how about with anything 5 and more? I realize you obviously can not get a conventional mortgage, but I use a small community bank, so financing won't be a problem. 

I would like to know, the differences from a government rules standpoint? For example, I heard that you have to have a dedicated on-site property manager for some large units? What about the mechanicals, I have heard you need specialized equipment for things like HVAC, and hot water heaters. Can you please clarify the differences between residential and commercial real-estate from this perspective.

It all depends on your area and your local laws. Of the top of my head I dont know of any national requirements. Real Estate is always local. I live in Central NY and each surrounding county has different rules. I wont even begin to talk about rent control which is enforced only a 5 hour drive from me in NYC.

Is there a local real estate group in your area? If so join them and listen. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.