Risks of buying condo in largly commercial building

[Michael Spearman]

Hello BP,

I'm currently researching a condo that I'm interested in purchasing as a primary residence. During my research I realized that this building is over 50% commercial space and therefore most banks require 20% down and will not give a conventional loan. I'm pretty familiar with this neighborhood and it's an area that has some development to do before it becomes highly desirable. The commercial spaces below the building are almost all (10 out of 14 spaces) vacant and the ones that are there probably aren't doing too well. I'm wondering what are the risks associated with purchasing a condo in a largly commercial building with possibly failing businesses in it.

The current risks I see are HOA increasing if too many businesses go under and difficulty selling due to weird financing. I'd like to know the risk factors as well as any possible positive outcomes from the commerical spaces succeeding in the future.

Any info or personal experience related to this is very appreciated. Thanks! 

Michael.

Edit: Are there any suggestions for getting information/documents relating to the commercial aspects of this property that would be very helpful in my assesment?