All Forum Posts by: Karen Green

With most Commercial Buildings, the Class (A,B,C) refers to the size, age, quality of workmanship (construction) and amenities offered with A being the most state-of-the-art and offering the most amenities.  It is important to note that the class of the building in one market may differ than that in another. For example, a class A property in a big city may be completely different than a class A in a small city. Thus, the classifications are somewhat area specific. No matter where it is, the most expensive building, Class A attracts tenants able to pay more for luxuries (amenities) such as fitness rooms, tennis courts, dog exercise areas, pools, cafes, covered parking, nice elevators, gorgeous landscaping, quality construction on both exterior and interior, well appointed lobbies and meeting areas, etc. This kind of building is typically a high-rise in a business district under 10 years old so it also has up-to-date security systems, HVAC systems and communication systems. They are found in fantastic locations. A Class B building can be made into a Class A with major renovations if it is a high-rise in a prime location.

Class B buildings are typically between 10-20years old and are generally located in the suburbs. The buildings are generally pleasing to the eye but are not jaw dropping like the Class A buildings. They have some amenities such as elevators, pools, landscaping, etc. and and are generally well constructed. Class B buildings should have good HVAC systems and will be in an affordable range, not as high as the Class A buildings.  Some Class C buildings can be made into Class B buildings given the right location and modifications/upgrades.

Class C buildings are generally between 20-30 years old or even an older renovated property. The building usually looks a little stale. It may have deferred maintenance and could use some updated mechanics and appliances. These are generally located further away from desirable areas. There is a Class D as well which is even older and requires more work to be done.

Christopher, we do not need to limit ourselves, however, we do need to protect ourselves. I have been an Investor and Realtor in Pennsylvania for over 20years. For 10 years I flipped homes with a full time crew on payroll. In my experience, the best thing to do is disclose, disclose, disclose. We are held to a much higher standard than anyone else since we SHOULD know more than the common Buyer/Seller. That said, first we must make sure that we adhere to our state regulations pertaining to disclosures regarding who we are. In other words, we have disclosed two things on all paperwork 1) that we are licensed real estate agents in ______ state and 2) any and all property defects regardless of how big or small. Also make sure you have taken photographs of everything before the buyer takes control of the property in the unfortunate instance that they deem it necessary to take you to court. Always assume the worst and hope for the best! This practice could save you tens of thousands or even hundreds of thousands of dollars. Good Luck!

This is a nice acquisition, especially for an owner financed deal. Are they all in the same geographical area? I am curious as to the numbers. Are you willing to share any details (rent rolls, Trailing 12-mo, vacancy rates, etc.)?

Congrats on your first purchase? How did you finance this property?

Nice job! You seem to have learned well through your research. Education pays off. Soon you will be doing your next deal!