Buying Commercial Property using Residential Realtor

[Holly Hudson]

Hi BP!  We own a few single family properties we use as rentals. While looking for another in a different state, with a new to us realtor, we found a multi-unit (over 5 units) that we are interested in putting an offer on. Only then did we learn that this will be the realtors first commercial transaction as well. Great guy but probably not the best scenario to have newbies figuring this out together. But we are where we are. 

I've learned from BP that what I do not know is mind boggling.  I'm digging into BP and the www to take a crash course on trying not to make huge mistakes. SO, would you mind please informing me of what I need to know (right after the part about starting with an experienced commercial realtor) What a realtors part would usually entail, what buyers should be doing.

Don't be gentle. I'm excited to take this next step in our investing journey and know it will be an education in itself, but I want to make sure I understand the purchasing requirements and process and steps to be a success for all parties. 

Thank you!

[Evan Polaski]

@Holly Hudson, I fully understand I am jumping in sort of late.  In my experience 5+ units from a financing perspective is commercial, but from a functional standpoint is much closer to "residential" than commercial until you get to 15, maybe 20 units and up.  As @Taylor L. on what I would call true commercial properties, the buyer is not working with any agents/brokers.  The buyer is out networking with brokers to hear about properties coming to market.  

At least in Ohio, being a commercial broker/agent is simply branding.  There is no distinction from a licensure standpoint to be representing residential or commercial properties.  And obviously, there are a lot more residential transactions happening than commercial, so dealing with a residential agent doesn't automatically preclude them from knowing a lot about 5 unit, 7 unit, 12 unit properties.

When looking for properties, if you are going to use the help of an agent, I would be looking for someone that OWNS multifamily first and foremost.  This changes when you are looking at properties that are outside of the scope of most people, as clearly the people representing $100mm 500 unit apartment complexes likely doesn't own any, but this line is very grey depending on area.