Commercial Real Estate Investing : need your help, BP!
Dear BP,
This site offers a LOT of useful info (and great calculators) helping newbies to start investing into residential real estate: rental SFRs, multiplexes, condos... That is great, and I did it for some time. Worked well.
But now, I would like to start transitioning towards commercial real estate. It is simply where I would like to go as RE investor... So I combed BP for useful info but it is not exactly easy to find... Precious few threads, and some of the lingo in them feels kind of confusing to simple-minded me... So I need your help. Some questions below, hopefully not too foolish for your taste. I am no Shakespeare, and I admit, my thoughts are a bit scattered. Help me focus. I will greatly appreciate it.
1) How do I make the step from individual SFRs and small multifamily towards a Commercial property? How do I know if it's the right time? Is there a specific target net worth? A level of liquidity? A minimum capital needed to make this step?
2) What are the different types of commercial properties, and which types flow better? Are the better-flowing properties riskier? What does the risk consist of? How do I evaluate a commercial property?
3) How do I recognize a good deal vs. a mediocre one? Or a dangerous one? I hope you can share some rules of thumb with me.
3) How do I evaluate the location / market? What are the important things to consider?
4) If the commercial property is listed a specific price online, is that price pretty much locked, or can that be somehow negotiated down a bit? For example, if the cap rate seems low.
5) What is the difference between an N, NN and NNN property? Can you help list some caveats that a less experienced investor should be careful of.
6) Does low- or no-money-down financing exist for commercial properties, and how can that be obtained? Where do I look?
7) Working with a commercial real estate agent or broker: how does the great professional get paid for protecting your interest? Is the system similar to residential real estate? How do I interview an agent, what do I look for, how can I know the agent is on my side? How do I avoid conflicts of interest?
Phew... please help! Thanks in advance.
Miki