How Hard is it to Dive Into Commercial Real Estate

[Lavada Lindsey]

Hello. My husband and I have been investing in real estate for a little while now. We flipped our first property and are now at the tail end of a rehab that will be a rental. He recently found a great commercial building (4 apartments and 1 store front) for under $250K. The best part about it is that the owner is accepting seller financing. It's certainly something that I'm excited about taking on but he's starting to get cold feet and doesn't think our first multi-family unit should be a commercial property. He says he doesn't want to deal with attornies and the insurance, etc. 

Can people please give me your feelings on this? Is it really difficult/expensive to deal with commercial properties? Do you think it's something we should hold off on? Or should we go for it? Does anyone have any advice on next steps (actually first steps)...etc.

Any information and knowledge you can share with me will be greatly appreciated.

Thank you,

Lavada

[William C.]

Talk to your real estate agent. The biggest difference in my opinion will be finding commercial Tenants for the commercial space. What is the demand in your area? What are the market rates? Your renting to businesses instead of people looking for a place to live so it will be a whole new ball of wax, but a good agent should be able to point you in the right direction. The great thing about real estate is the numbers won’t lie. Assuming there is demand for the commercial space, assuming there is for the residential space, the numbers will tell you whether or not to jump in or to pass. I personally know the residential side like the back of my hand but really don’t have any experience with the commercial side. If I could still cash flow assuming a long vacancy in the commercial space I’d likely look into it. It all comes down to supply and demand, which also will affect the price, or vice versa, but it’s a local question that most likely can’t be answers by someone on here, and could be better answered by a good commercial agent in your area. Best of luck.