Why commercial over residential?

[Peter Tverdov]

I have an opportunity approaching in 2017 to buy a small MXU building ($500-$600k). I am running the numbers and between the high insurance rate and the much higher interest rates with shorter amortization schedules, it absolutely hammers your COC return compared to buying a 1-4 family house.

Was just looking for some opinions as to why people like commercial so much? Longer term tenant? Appreciation? Aside from finding a place under rented that needs updating, I don't know what I'm missing.

What terms do you guys generally prefer? I can't see myself accepting anything less than 25-30 year amortization.

For the record, the building I am considering is under rented, has the ability for an addition to be put on for more cash flow...but still. Just curious as to what strategy people have in the commercial space.