Commercial Real Estate Law Resources?
I'm a total newbie to commercial real estate but I've been very interested in getting in the market. I found a property I'd like to make a move on, but just wanted to know what the primary differences would be between owning a commercial property vs owning a residential one. I have a little bit of experience owning residential so I already know a few differences just from researching, but just a few. Note that I'm hoping to close with a cash deal (if possible) since I've heard commercial loans have higher interest rates (is this true?) but I'm still curious about the differences in mortgages.
[{"id": "dg7hz47", "text": "Sounds risky buying a commercial property without understanding what that entails. There is a lot more that goes into it than residential, more than can be summarized here.\n\nWhat's the zoning? What uses are allowed there?\n\nWhat are you going to do with it? Rent it out?\n\nDo you have legal counsel to draft a commercial lease?\n\nDo you know what lease concessions (which often cost a landlord many thousands of dollars) are needed to attract the level of tenant you want? Things like Tenant Improvement Allowance, Leasing Commissions, Free Rent (Abatement).\n\nWhat are typical leasing structures and rental rates so you don't get taken advantage of? NNN? Modified Gross? What about renewal options? Termination options? Security Deposit? Annual escalations?\n\nHave you underwritten the deal to stress test it under changes to occupancy or market conditions?\n\nWhat are the property taxes? Will the property be reassessed upon your purchase?\n\nWhat is the physical condition of the building? Does it need improvements? Does it need a new furnace or a new roof or new windows? Does it have enough parking? Does it need to be on a high visibility location for a potential business located there?\n\nAre there any pending zoning or land use changes being considered that could impact your property or other properties around it?\n\nAre there environmental issues?\n\nDo you plan on financing it, (despite your all cash offer)? What are the typical rates? Term lengths? Do you need capital reserves? What in-place income is required?\n\nHave you looked at the cost of insurance for a commercial property? You'll want to require liability insurance from your tenants as well.\n\nAre you purchasing it on your own or with partners, are you creating a new LLC for this purchase?\n\nNot trying to freak you out and you are absolutely doing the right thing by doing your homework and asking questions, but from the questions you are asking, I think you have quite a bit more homework to do before purchasing a commercial property unless you are willing to take on a very high level of risk not knowing the answers to all these questions.\n\nIt's worth the time and money to seek out someone who does this all day every day for their advice. They may be able to point out an issue that you've overlooked that can save you a ton of money. And if everything is great and it's a good buy, then it's good piece of mind an the education on these issues will be very useful for future projects.", "replies": [{"id": "dg7jdyi", "text": "Thank you so much for this response. This is exactly what I was looking for. I certainly won't buy a thing until I look into the points you raised.", "replies": [], "depth": 2}, {"id": "dg8weip", "text": "The parent mentioned [**Commercial Property**](http://legaliq.com/Definition/Commercial_Property). For anyone unfamiliar with this term, **here is the definition:**^\\(In ^beta, ^be ^kind)\r\n****\r\nThe term commercial property (also called commercial real estate, investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income. [[View More](http://legaliq.com/Definition/Commercial_Property)]\r\n****\r\n^(**See also:**) [^Abatement](http://legaliq.com/Definition/Abatement) ^| [^Zoning](http://legaliq.com/Definition/Zoning) ^| [^Tenant](http://legaliq.com/Definition/Tenant) ^| [^Security ^Deposit](http://legaliq.com/Definition/Security_Deposit) ^| [^Legal ^Counsel](http://legaliq.com/Definition/Legal_Counsel) ^| [^All ^Cash ^Offer](http://legaliq.com/Definition/All_Cash_Offer)\r\n\r\n^(**Note**: The parent poster ) ^\\(cbarrister ^or ^Giblaz) ^can [^delete ^this ^post](/message/compose?to=LawBot2016&amp;subject=Deletion+Request&amp;message=cmd%3A+delete+reply+t1_dg7hz47) ^| [^**FAQ**](http://legaliq.com/reddit)", "replies": [], "depth": 2}], "depth": 1}, {"id": "dg7jkyx", "text": "First off, what do YOU mean by commercial?  Do you mean a retail building, an office building, perhaps a larger multifamily? All those could be called Commercial. ", "replies": [{"id": "dg7jol1", "text": "Good question - the property I'm looking at is an office condo", "replies": [{"id": "dga2njt", "text": "Unless it's big and you can do something novel with it, office condos arent good investments. You want a whole building. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]