Moving from Residential to Commercial RE (NE Florida)

Investor · Member since 2022 · 186 posts · 155 votes

Hey everyone, I've spent the last few years investing in and managing residential properties. I'm looking to break into the commercial real estate market and am wondering about the best entry points. 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!

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Gabe OrlanskyPro Member

Lender · Miami, FL · Member since 2026 · 21 posts · 4 votes

2mo

I think the first step is deciding what type of commercial real estate you want to focus on. CRE is a huge umbrella, and specializing in one asset class usually beats chasing every opportunity.

My biggest advice: underwrite lots of deals before buying one. Learn NOI, cap rates, DSCR, and debt, and build relationships with brokers, lenders, and investors.

Biggest lesson: don't rush your first commercial deal just to "get into CRE." Patience and good underwriting will save you far more money than jumping in too quickly.

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Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
2mo
Commercial is a whole new world. Very little compares with Residential RE, except in markets without specialized Commercial RE companies. Some consider small to medium multi-fam properties and smaller "Mom & Pop" properties to be commercial, but those investors are often very different from the Big Boys that deal with National Chains, High rise and specialty Professional spaces, Grocers, and the like. To run with them, You really should start by getting a CCIM designation. It is costly, is difficult, and takes weeks of intense study and classes to achieve. But, you will have a huge head start. Actually, you likely still need to be working at a brokerage to be able to work one of the segments, but if you get 3/4ths of the way there, it will certainly help you get your foot in the door. The brokerage might even pay your tuition for that segment!
You can also familiarize yourself with commercial contracts here. While these are somewhat standardized, they are very representative of the detail and complexity you will see. The reality is that most contracts are unique to a region or brokerage.
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Gabe OrlanskyPro Member
Lender · Miami, FL · Member since 2026 · 21 posts · 4 votes
2mo
I think the first step is deciding what type of commercial real estate you want to focus on. CRE is a huge umbrella, and specializing in one asset class usually beats chasing every opportunity.

My biggest advice: underwrite lots of deals before buying one. Learn NOI, cap rates, DSCR, and debt, and build relationships with brokers, lenders, and investors.

Biggest lesson: don't rush your first commercial deal just to "get into CRE." Patience and good underwriting will save you far more money than jumping in too quickly.
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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
2mo
I'm actually in Sarasota myself, so commercial deals come up often in conversations here too.

The entry path itself, small multifamily versus retail versus mixed-use, is more of a strategy question for others here with commercial experience to weigh in on.

Where the tax side shifts meaningfully, commercial financing terms differ a lot from residential, and interest during any renovation or construction period before the property is placed in service generally has to be capitalized rather than deducted currently, worth factoring that into your underwriting since it's an easy thing to miss coming from residential where that distinction matters less. Cost segregation also becomes a bigger lever on commercial, these properties tend to have far more separable components, HVAC systems, parking lot improvements, specialized electrical, than a typical residential property, so a study is worth running the numbers on for any commercial deal you're evaluating.

If you're bringing in partners or lenders for a bigger first commercial deal than what you're used to on the residential side, also get the entity and profit split structure locked in writing before closing, commercial deals tend to involve more parties and more complex capital stacks than a typical residential purchase, so that documentation matters even more here.

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Mohammed Rahman
Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
2mo
Hey Vicki,
Making the jump from residential to commercial is exciting, but I'd also go into it knowing that commercial real estate is a different beast. The fundamentals of investing still apply, but CRE is generally a lot more complex. You're dealing with different lease structures, tenant improvements, CAM charges, financing, zoning, due diligence, underwriting, and often multiple stakeholders. There's a lot to learn, which is why I'd recommend focusing on one asset class first instead of trying to learn everything at once.

I'd also spend time learning how commercial deals are analyzed. Understanding NOI, cap rates, lease terms, and how value is created will give you a much stronger foundation before you start making offers.

If you're looking to build experience, don't overlook working in the industry either. Roles like an Assistant Property Manager or Tenant Services Coordinator can give you a front row seat to how commercial properties are actually operated. You'll learn things that are hard to pick up from books alone, and you'll build relationships that can open doors later on.
The good news is that your residential experience isn't wasted. It gives you a solid base to build on. Now it's really about getting those reps, becoming fluent in how commercial properties operate, and continuing to learn from people already in the space.

Best of luck with the transition!
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