Very new and basic questions about commercial
I own 4 single family home that I am looking into the idea of 1031 into a commercial property to reduce my headaches. I would like to preserve or increase my cash flow if possible.

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selling four house will generate 975k

after i pay all my mortgages and BEFORE TAX I will have roughly 550 - 650k in cash 

So I need to replace this with 2 or 1 totaling  &gt; 1mil 

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1) How can I find commercial real estate, is it just through loop net website ?

2) how safe is it to purchase triple NNN lease out of state ?  I am in AZ.  How does one verify that my tenant is doing maintenance to standard ? do I keep a commercial building inspector on hand and have him check every quarter  and report to me?

3) Are cap rate all variable base on location ?  if I sell what I own now, I will make about 550k - 650k cash after paying off all my mortgages so I am looking somewhere between 900k - 1.2mil in order for my 1031 to work.  is it possible to find something for  900k - 1.2mil with 8 cap rate or higher ?

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4) What education do I need in order to be able to lease my own commercial real estate ? I figure I need a lawyer to draft the lease to be safe as it is commercial.  I have experience in managing single family residential for 7+ years. I have familiar with lease drafting, walk through, evictions, court orders, how to get my tenant serve, major repairs such as sewer lines, A/C, roofing work.   Basically I have enough contacts to run everything residentially.

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5) if a broker leases my real estate for me what is his commission ? and how is it paid ?

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5) any other suggestions that I read or look into to accomplish my goal ?  if I have 550k to play with i am sure some bank will loan me the rest ?  I have &gt; 720 credit score 

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thanks for your answer
[{"id": "fm38fxo", "text": "* 1) I would strongly suggest finding a sales broker that specialized in NNN transactions. Otherwise, yes Loopnet is probably the best resource. CoStar is good too but you need a subscription/broker to access it. \n* 2) Fairly safe for a tenant with good credit and as long as it's a true NNN lease (no or very little LL responsibility).\n* 3) I would think you can find something in the $1M range but not sure if you'll find it at an 8 cap. Also, assumed risk comes with that higher cap rate (lower credit tenant).\n* 4) Broker, real estate attorney\n* 5) Depends on market. Most retail commissions are based on a percentage of the total base rent of the initial term. I think a safe assumption is 8%. If there is only 1 broker involved, 4%. \n* 6) Again, I'd find a good broker that specializes or at least has a lot of experienced with national NNN sales. Your residential experience will help on the management side but commercial is different in a lot of ways.", "replies": [{"id": "fm4bahb", "text": "thanks for answering, do you know what i can read or use to gauge risk factor ?\n\nI was looking for medical , automotive, restaurants, fast food, stuff that is amazon proof.\n\n&amp;#x200B;\n\nIt seems like commercial is all about the lease attached to the property that makes it valuable.\n\nHow does one negotiate pricing ?  since they all have diff deals.", "replies": [{"id": "fm4j6fb", "text": "Asking cap rate should give you a very good gauge off the bat about the riskiness of the tenant. Lower cap rate/higher price = good credit/less risk. Higher cap/lower price = less credit/more risk/potentially short lease term left. Check out some of the reports here to get a sense of pricing, cap rates and sale prices for tenants: https://www.bouldergroup.com/research.html", "replies": [{"id": "fmmo6g1", "text": "&gt;Asking cap rate should give you a very good gauge off the bat about the riskiness of the tenant.\n\nAlthough a cap rate does reflect the markets perception of risk it is not measurable.  A 10% cap rate market could be less risky than a 5% cap rate market.  It is up to investors to determine why investors are paying $10 for NOI in one market and $20 in another.\n\nNovices fail to realize that capex is not a part of the cap rate formula.  Let's say you have McDonalds renting regional offices from you in San Francisco and Indianapolis.  Rent in SF may be $80 a sf and only $20 in Indy.  So to get the same PGI, potential gross income you would need 4 times more sf to get the same PGI.  So a 50,000 sf building in SF is going to have a PGI of $4,000,000 and in Indy you will need a 200,000 sf building to get the same PGI.  So even if you consider the operating expenses to be the same, they won't, then you both have a NOI of say $2,800,000.  SF has a NOI of $56 per sf and the INdy has a NOI of only $14 per sf.  Now look at all the capex that is based on sf.  See how capex will wipe out your NOI even if you paid half what the SF investor paid?\n\nSo you see how even though your tenant is the same risk you are better with the low cap rate.", "replies": [{"id": "fmmtq7c", "text": "Of course, agree with everything you're saying. Just trying to give OP a very basic idea of what they're getting into. They need a broker.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fm5q902", "text": "Not gonna have to worry about a national credit tenant deferring maintenance very much. It\u2019s in their best business interest to keep the property maintained both mechanically and aesthetically. They have real estate departments handling all their maintenance for their stores. \n\nAnything you purchase will have a lease in place, hopefully a long term one. Will need a commercial real estate attorney to draft or negotiate a contract with the seller and handle closing. Broker can point out the good and bad concerning the lease on the property your buying. \n\nIn the NNN world, lots of cash buyers on anything below $2MM so have your lender(s) ready to roll. \n\nRight now an 8 cap on a credit tenant would likely be a tertiary market. I personally like those for cash flow if the property is like at the entrance or a shadow to a WalMart Supercenter. \n\nI\u2019ve helped lots of buyers transitioning from residential to commercial for the very reason you are considering making the move. It\u2019s a natural progression investors seem to follow. Buying more SFH means having to be a full time property manager or hiring one. Commercial offers a more passive income. Just don\u2019t expect to see fire sales in the commercial world. Lots of wealthy owners who can sit on a property if need be. \n\nLoopNet can be a good place but a lot of deals never go outside the firm so having a good relationship with a broker(s) is beneficial.", "replies": [{"id": "fm5z9ll", "text": "I agree with first point,  but if I triple NNN lease to smaller mom and pop they might not have departments to handle it ? and I would like to be assure my building is maintained.\n\nthanks for all the other points\n\nany additional tips on residential into commercial transition ?\nI have too many roofs and a/c to deal with and I think scaling upward is horrendous and not feasible.  But on the other hand I have all my eggs in one basket of 1mil property.   Any reason why I should not do this ?", "replies": [{"id": "fm7m236", "text": "I would advise hitting the pause button for a little while for two reasons. Let the market settle down and see how this disruption will play out as it relates to values both in commercial and residential. Use this time to learn all you can and become a more educated investor. Almost all the deals happening right now were under contract and the money is hard or it\u2019s a 1031 buyer who must transact. Maybe you decide to buy two different NNN properties in separate states or only one to test the waters.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fm8erpr", "text": " **8 cap rate or higher ?**\n\nI can sell you 8% cap rates all day long.  Why are you targeting 8%? \n\nA cap rate is a valuation metric coming from an income approach to value called direct capitalization.  It measures what investors have paid for NOI.  At 10% they paid $10 per possible dollar of NOI and at 5% they paid $20 for that exact same possible dollar of NOI.  Don't be tricked into thinking it is a profitability metric.  It measures value.  You need cap rate comps of similar assets in similar markets from closed sales.  Using those comps you can determine the probable market value of your NOI.  Only after you have a market value can you calculate the potential profitability.  If you buy $100,000 NOI at 8% you will pay $1,250,000.  But if the comps are 10% then you should have only paid $1,000,000 V=I/r.  You overpaid $250,000.", "replies": [{"id": "fm9ddm7", "text": "is it standard to talk to multiple commercial broker ?  another post said that some deals don't make it to loopnet and are done in back office and the only way to get them is to talk to brokers ?", "replies": [{"id": "fm9ib7k", "text": "Yes!  Even in residential the best deals go to the brokers and their friends/best clients. But you need to be knowledgeable about your market and ready to act.  They are not going to bring you many deals if you sniff each one because you wouldn't know a good deal when they put it in your lap.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]