Think about switching to CRE
Hi, I currently have a residential property that generates $1,650 a month at a cost of $825/month. Yes, very good profit margin. I could sell right now and generate around $75K profit. Couple of questions as someone who would be new to the CRE scene:

-what kind of down payment is required for purchasing a commercial property?
-are interest rates similar to residential?
-what is the turnaround on selling? i.e. Days on market
-vacancy rate in major city?
-is this even a reasonable idea?

Thought process is my current investment is in a condo. Buying a commercial property could hopefully generate more income and lead to opening a CRE business. 
[{"id": "dnho4xz", "text": "Contact a broker in your area. Do you have a property in mind and is it fully leased?", "replies": [], "depth": 1}, {"id": "dnhp9uq", "text": "You need exponentially more cash in commercial. For a new investor, at least 20% down plus sufficient liquidity to carry the property during bumps in the road.  \n\nRates vary depending on property type and location. ", "replies": [{"id": "dnhq6r6", "text": "I came across a 1,000 sq ft medical office for $300K. $60K for down payment with some left over. Plus I have some savings. Would that be out of line?", "replies": [{"id": "dnhqznr", "text": "Commercial is all about Noi, so you need to understand the tenant, lease, and expenses, as well as market issues and anticipated capital outlay.", "replies": [], "depth": 3}, {"id": "dni1pls", "text": "Commercial is far more complex than residential. That is $300 per square foot. Is it an office condo? 1,000 is tiny. What is the NOI? What expenses other than tax, insurance, and standard CAM? Gross or NNN lease? Length of lease? What is the tenant profile? ", "replies": [{"id": "dnicrzv", "text": "From what I can make of it, OP is looking at a plain vanilla shell, un-tenanted medical office property in some unknown part of the country. \n\nNot realizing that he probably has to drop $40 PSF in TI's, with about a 8 month time to complete TI's before he can get a COO, PLUS, he does not have a tenant in tow for said property. \n\nThis is why I hate loopnet. ", "replies": [{"id": "dnj0u7u", "text": "If that is the case, most banks would not be able to provide the financing that he is seeking. Then once a tenant is established, the lease agreement would need to at least match the term maturity. ", "replies": [{"id": "dnj9xnh", "text": "The interest on that would be fairly high. I suppose he could cash out refinance his condo, the rates on that would be lower than what a bank would be able to charge. Assuming he can cash out about 400K. ", "replies": [], "depth": 6}], "depth": 5}, {"id": "dnkcs1l", "text": "Yeah TIs for medical? Shiiiiiiiiit. It aint a retail store thats for sure.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "dnj9pni", "text": "Is it fully leased already? If so, what is the tenant paying we can help determine a cap rate. \n\nIf not, what are your plans to get it leased up? ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dni41jk", "text": "Vacancy rates can kill you. I work in CRE. Sometimes we have spaces open for a year plus in a really good market. Tenants also expect TI money. I've dropped $100k into a space for a tenant before. ", "replies": [{"id": "dnmwjb5", "text": "&gt; TI money.\n\nWhat's that?", "replies": [{"id": "dnn925o", "text": "Tenant improvement. In my market, landlords are expected to put up TI money. My company does the construction for them but most landlords are writing a check. ", "replies": [], "depth": 3}, {"id": "dnon3x0", "text": "At least in my market, Landlords typically expect Tenant Improvement allowances to run a minimum of 10-20% of the aggregate base rent over the term of the lease for office space.\n\nExample:  5,000/sf @ Net Effective Rate of $20/SF over five year = $500,000  \n\nThat puts the TI allowance around $10-$20/sf which isn't a whole heck of a lot of money for buildout.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dnkcqci", "text": "You can get a 75% loan to value for cmbs loans, but they come with headaches of their own. Turn around is like asking how long does it take to sell a car?", "replies": [{"id": "dnlkuih", "text": "CMBS won't mess with a property of this size, and even if that was reasonable that wouldn't be a good idea for a new investor. ", "replies": [{"id": "dnmwkjk", "text": "So what is a good idea for a new investor?", "replies": [{"id": "dnn2gt4", "text": "To obtain debt for commercial deals or in general? Really the answer to both is to keep doing what you're doing and building. Your holdings will eventually reach a point where a jump to commercial deals is more organic than forced. That track record will help you with debt and the equity will be needed. ", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dp606m2", "text": "Multifamily lender here.\n\n-Based on my experience, multifamily (which is considered commercial if the property is 5+ units) is the most natural transition from single-family resi. In multifamily, expect to put down at least 20%, and be prepared to put down 25-30%, depending on the lender and loan amount. \n\n-Oftentimes, the more you put down, the lower your rate will be.\n\n-Rates can range from high 3\u2019s to mid 5\u2019s, dependent on loan amount, leverage, and location.\n\n-Some lenders may also require you to hire 3rd party management for the first 12 months if it\u2019s your first multifamily property.", "replies": [], "depth": 1}, {"id": "dp8wsq6", "text": "Been trying to get an answer on this from ppl in the industry. Sorry to hijack thread no one responds to mine.\n\nI have the opportunity to join a commercial brokerage that also develops properties. I would be a jack of all trades here and it's a boutique firm so tools and training probably aren't as good. I get the feeling they care more about my success either, I won't be just another body. The owner is known in the local community and is a major known figure here in Dallas. \n\nI also have the opportunity to join SVN. So I'm really confused as to which way I should go. ", "replies": [{"id": "dp98y78", "text": "I don't work in real estate but have been the \"Jack of all trades\" before. It didn't end pretty as I wasn't valued enough (didn't really have a specialty). You might have a good opportunity here, but I would just be cautious of that. ", "replies": [], "depth": 2}], "depth": 1}]