Landlord offering to sell condo to me - first time buying commercial
Hi everyone, 

So I've been leasing this building for 5 years now and out of the blue the landlord asks me if I wanted to buy the condo my business is in. Personally I think its a great deal and beats paying rent.

I have no idea how to buy a commercial, I did a bit of research and its not like the standard 30 year mortgage kind of thing.  I just have a few questions:  


Do I need a broker?

Do I have to create an LLC or something similar to be able to buy or can it be under my name?

Is it a bad thing to buy the property under my name?

Is the process like getting a house, like getting an inspection and negotiating?- For future reference.

Is getting a mortgage/loan a lot more involved?

&amp;#x200B;

Thanks guys!
[{"id": "godc75c", "text": "I might be misunderstanding, but if it\u2019s a singular condo (and not a full apartment building) wouldn\u2019t that just be a residential purchase? \n\nI might be misinterpreting the wording here. By condo, do you mean suite your business is in in a commercial building?", "replies": [{"id": "godcqce", "text": "He probably means commercial condo", "replies": [], "depth": 2}, {"id": "godcxgn", "text": "Correct, my business is in a mixed use downtown area. One building with apartments on top and 2 businesses on the bottom. He's just selling the \"Retail Condo\" unit to me.", "replies": [{"id": "godd5n8", "text": "Got it. Sorry for confusion. I think this could be interesting. I believe the SBA has a program that assists small business owners in buying owner occupied commercial real estate - definitely look into that", "replies": [], "depth": 3}, {"id": "godi8as", "text": "Are there condo fees? Is it really a condo?  Are the commercial units condos?\n\nWhat is he selling to you? The entire building or ....", "replies": [{"id": "goebjyw", "text": "&gt;One building with apartments on top and 2 businesses on the bottom. He's just selling the \"Retail Condo\" unit to me.", "replies": [], "depth": 4}], "depth": 3}, {"id": "gofc35f", "text": "Check into fees and management obligations for the entire condo unit and make sure the math checks out but owning a retail unit in an urban environment is a sound investment. If you\u2019re successful there, others can be too if you ever decide to lease it out.", "replies": [], "depth": 3}], "depth": 2}, {"id": "godz4u7", "text": "Condo doesn't mean residential, it's just a way of subdividing ownership.  Anything real estate can be a condo.  Something that looks like an apartment, townhouse, or single-family house.  An office building.  A boat dock.  [A piece of grass near a football stadium](https://www.redfin.com/SC/Clemson/141-Old-Greenville-Hwy-29631/unit-Tiger-Park/home/146962808).", "replies": [], "depth": 2}, {"id": "goebhkh", "text": "Why are people down voting comments like this?  The dude asked a reasonable question.\n\nFor the record, condos come in all shapes and sizes, including retail (apportioned segments) buildings, industrial, even for single investors who want nothing more than a \"man cave\".", "replies": [], "depth": 2}], "depth": 1}, {"id": "godd6us", "text": "Commercial RE is are several asset classes, yet a single condo or apartment is considered residencial. Unless you purchase the property and it has 5 doors or more. I may be mistaken and you are talking about an office space which is considered commercial.\n\nIn respect to your situation, consider making a cost analysis of what it means to purchase the space and a market analysis as to the popularity of the space kncase you move out and need to rent it to another party.", "replies": [{"id": "gof81a0", "text": "There are condos in commercial space. Why are you posting here if you have no idea what you're talking about.", "replies": [], "depth": 2}], "depth": 1}, {"id": "godeypw", "text": "Look into assessments and condo association fees to see if there is a reason they are wanting to sell. While your rent is locked in, the fees are not, and therefore they could be losing money on your unit due to a sudden rise in fees or assessments.\n\nTo answer your questions, in order: You do not need a broker. You are better off most likely creating an LLC and leasing to the business for liability and tax purposes. See previous answer. You can always negotiate, but read the condo docs because most repairs are likely not the responsibility of the landlord and use a commercial contractor not a residential inspector.  Yes, it is harder to get a commercial loan, but you can use a SBA 504 or 7a loan to acquire, or if it is not a significant purchase, talk to your existing banker and small community banks in the area.", "replies": [{"id": "gogjuhm", "text": "Make sure to get a roof inspection by qualified commercial roofing company.  Ask LL the age of roof as well.  If 25 years or so it may be a red flag - maybe LL knows there is a roof assessment forthcoming.  Because that is how you get hurt.  Roofs (and parking lots too).  Furnaces and water heaters and stuff, they really are not that expensive.  I own a few 2500 s.f. office condos and I have done furnace replacement for 4000 or less.  But I got a bid recently for a roof (rubber membrane) on an 8000 s.f. building I own and it was $85,000.\n\nAlso as a comparable - I did a commercial loan last month at 3.5% and I feel like you should be less as an owner occupant, but I am not positive.", "replies": [], "depth": 2}], "depth": 1}, {"id": "godgbtp", "text": "Talk with an attorney and accountant to understand potential risks. There may be benefits of buying it under the company name, or buying under a different LLC that the company pays rent to.\n\nReach out to your local bank and ask if they offer sba 504 loans. \n\nYou can likely have a broker run a Comp report without having to engage them to see what other retail condo/coops trade for in the area.", "replies": [], "depth": 1}, {"id": "godj9d1", "text": "You should find a lender that is well versed in commercial lending. You may be able to title the property in the name of your LLC, but they may ask you to be personally liable for the note. \n\nI\u2019d look in public records to find out which condos have recently sold. You might have some good comparable sales to base your offer on. \n\nMost commercial condo notes I\u2019m aware of only go out 25 years max. Expect to pay about .5% to 1% more than you would for your primary residence. \n\nAs others have said, make sure there are no special assessments going on. Also learn what the OA dues are and what they cover. \n\nA commercial broker would be recommended", "replies": [], "depth": 1}, {"id": "godwwnq", "text": "Is your business a sole proprietorship? Do you have an LLC, corporation, or other entity?\n\nIf you form a separate entity and rent to yourself, the IRS has rules about self-rentals. Talk to a CPA.\n\nLook into SBA 504 loans. They're intended for businesses to purchase office/retail/warehouse real estate that the business will owner occupy. The lender may require you to purchase it in a separate LLC that owns the real estate, or they may require some other ownership/operating structure. Talk to multiple banks. They may have additional requirements (e.g. an environmental report) that you would not typically require for a residential purchase. You'll definitely want an inspection. Most likely you won't have much room for renegotiation unless there are major repairs or things that affect the condo's potential rental income.", "replies": [{"id": "goeb8b2", "text": "This should not have been down voted.  There are some incredible loans from the SBA currently.  The feds are doing everything but giving you a foot massage right now as to assisting you in getting a loan.\n\n504 loans are up to 5 million and can be used to buy fixed assets (buildings, equipment, etc.):  [https://www.sba.gov/funding-programs/loans/504-loans](https://www.sba.gov/funding-programs/loans/504-loans)\n\nYou can purchase real estate with a 7a loan as well:  [https://www.sba.gov/funding-programs/loans/7a-loans](https://www.sba.gov/funding-programs/loans/7a-loans)\n\nThese loans may not be for you, but....to not review the terms and conditions would be foolish in this market.", "replies": [], "depth": 2}], "depth": 1}, {"id": "goezkhl", "text": "My experience with managing commercial properties for a rich investor boss was this: \n\nCheck the property taxes,  these can get crazy high. \n\nDon't buy in your name. Buy in an llc or a trust.  Best to keep your property, business,  and personal assets separate  for legal protection. \n\nAssociation fees and if your not buying the building,  just a condo there may be extra fees for the property manager,  CAM charges.  \n\nAlso look at any upcoming major costs,  new roof,  plumbing changes due to new city codes,  ect. We had one property that the city started a new code requiring back flow prevention for all commercial properties that where previously exempt. Cost around $15k to $20k for the whole project. \n\nAlso always good to just ask the seller why he is selling instead of keeping a cash flowing investment. \n\nJust my two cents.", "replies": [], "depth": 1}, {"id": "gogbqac", "text": "Personally, I would not buy a retail condo as an investment. ONLY IF you are an owner-user.", "replies": [], "depth": 1}]