Commercial vs. Residential Real Estate Differences in Rules

[Hiron Fernando]

Hello, I am relatively new to Real Estate investing, with 1 single family and 1 duplex. I would love to take advantage of the economies of scale with an apartment complex (maybe 5-20 units). 

I feel pretty comfortable about the entire process of purchasing, rehabbing, and renting out 1-4 family residential, but how about with anything 5 and more? I realize you obviously can not get a conventional mortgage, but I use a small community bank, so financing won't be a problem. 

I would like to know, the differences from a government rules standpoint? For example, I heard that you have to have a dedicated on-site property manager for some large units? What about the mechanicals, I have heard you need specialized equipment for things like HVAC, and hot water heaters. Can you please clarify the differences between residential and commercial real-estate from this perspective.