Multi-Family. A gateway to Commercial Real Estate?

[Jolene Desmond]

I have always considered Multi-Family to be an asset class of Commercial Real Estate... But I see more and more Investors who consider Multi-Family to be neither Residential or Commercial - something of its own.  It also seems that some consider Multi-Family to be the gateway between the two - a way to transition into Commercial Real Estate.  

What are your thoughts?? 

[Andrew Johnson]

@Jolene Desmond Most of it boils down to <5 vs. 5+ units.  It impacts how the property is appraisal (i.e. valuation) and materially changes the terms for financing.  Not to mention that in one you can "house hack" and in the other you can't.  That said, while I own commercial *multifamily* real estate I've never considered it as "a way to transition into Commercial Real Estate".  If, but "commercial" you mean things like office, retail, medical, industrial, etc. space.  That's really a different animal (to me) where you have to look at things like ceiling height and loading bays for industrial.  If you're doing retail you have to look at car-counts.  People that deal with strip malls have to look at things like anchor tenants, what you have to do to get them, leasing commissions, etc.  It's all just a different world (to me) than commercial multifamily.  But that's me...