That question is a bit too nebulous and general to give you a specific answer. Of course, there are many differences in the level of due diligence, the likely level of capital funding, the structure of the loans and the Covenants in those loans.
They're also, depending on the type commercial property, significant differences and the level and degree management necessary to facilitate occupancy, maintenance, and economic returns.
The process, however, for originating loans, analyzing properties, and closing on both residential and Commercial properties is very similar.
Yes, there is a very different set of of skills needed for commercial and residential, as both are vastly different. Residential pros get designations such as CRS, which is the highest level of skill for a residential transaction. Commercial experts obtain a CCIM designation. Both designations require additional training (knowledge), volume (experience), and proficiency. Hire a professional Realtor for whichever field you need.
Yes it is a lot of differences to start with property evaluation approach,property inspection,other due diligence including environmental inspection and financing approach (CMHC option).For more details you can ask me specific questions and I will answer them with my knowledge and expertise.
The only real difference is the primary purpose of residential property is to provide someone with a place to live. Residential real estate deals involve people who are more emotional when it comes to conducting business, whereas commercial real estate buyers are thinking and acting in a more professional business manner.
Yes there are many different aspects between Commercial and Residential. The Mortgage side deals with them completely different as well as permits, inspections, deadlines and the like. I suggest check into Real Estate Companies and who see has the experience you need to proceed and have the biggest success to get closing done successfully. Of course, saying every deal is different on commercial and residential but it's a matter of who knows, has the experience and the education of knowing the right way to get it done in a timely manner. Any Agent should be glad to come give you the interview with them to find out if you sense they have the capability and it will be enough to proceed with your business dealings.
In short, the primary differences are defined by 1 to 4 units, single Family dwellings, it’s considered residential property. anything more than four units or a property that is primarily used for business commerce, is classified as commercial and will have a totally different set of disclosures and liabilities.
Their are many differences. Number 1. the forms are much more simplified. Commercial Real Estate is complicated but has not had the litigation that residential real estate has making the deals more streamlined. To whomever is asking: Are you interested in purchasing commercial real estate? I have had commercial real estate deals close in 30 days.
All good info on the responses below. If I can add anything residential lending is driven not only by the value and condition of the collateral property but also the credit, ability to repay and often assets of the borrower. While these are all important factors in commercial lending often more emphasis is put on the collateral property, it's value, use and revenue stream.
Yes, there are major differences between residential and commercial. Commercial is a property that has more than 4 units. It can also be mixed use. i.e. an apartment unit on the 2nd floor and a commercial store front/retail on the bottom. As long it has a commercial component in it, the building will be considered commercial. Also the building should have an allowed use for commercial purposes. i.e. CMX1,2,34(in the city of Philadelphia).
Another major factor is financing. The process is generally longer. However, with the right property, buyer and commercial lender, you can close commercial loans in under 45 days with as little as 5% down. Also commercial loans do not go on your personal credit report. Residential loans do. In residential, you are limited to the amount of loans you can take out. With commercial, you have can as many loans you want as long as you or the entity qualifies. Lenders will look at the 4 C's(cash, credit, collateral and competence). If you have all of those lined up, you are good to go for a commercial loan. Also, if you are purchasing a commercial property and it is already generating income, lenders will factor that income to qualify for the loan. There are many nuances and technicalities involving commercial real estate. Once you get the hang of it, it is a great source for residual income and helps build wealth in the long run.
Commercial valuation for appraisal purposes is a more complex process. It usually involves the analysis of financial statements as the value of a commercial property is dependant on the property’s ability to generate income. As a residential report usually costs $300-$600 a commercial one can be several thousand depending on the complexity of the property.
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Answers (511-520)
That question is a bit too nebulous and general to give you a specific answer. Of course, there are many differences in the level of due diligence, the likely level of capital funding, the structure of the loans and the Covenants in those loans.
They're also, depending on the type commercial property, significant differences and the level and degree management necessary to facilitate occupancy, maintenance, and economic returns.
The process, however, for originating loans, analyzing properties, and closing on both residential and Commercial properties is very similar.
Yes, there is a very different set of of skills needed for commercial and residential, as both are vastly different. Residential pros get designations such as CRS, which is the highest level of skill for a residential transaction. Commercial experts obtain a CCIM designation. Both designations require additional training (knowledge), volume (experience), and proficiency. Hire a professional Realtor for whichever field you need.
Yes it is a lot of differences to start with property evaluation approach,property inspection,other due diligence including environmental inspection and financing approach (CMHC option).For more details you can ask me specific questions and I will answer them with my knowledge and expertise.
Cheers,
Alex Kagramanov
Kamex Solutions Inc.
The only real difference is the primary purpose of residential property is to provide someone with a place to live. Residential real estate deals involve people who are more emotional when it comes to conducting business, whereas commercial real estate buyers are thinking and acting in a more professional business manner.
Yes there are many different aspects between Commercial and Residential. The Mortgage side deals with them completely different as well as permits, inspections, deadlines and the like. I suggest check into Real Estate Companies and who see has the experience you need to proceed and have the biggest success to get closing done successfully. Of course, saying every deal is different on commercial and residential but it's a matter of who knows, has the experience and the education of knowing the right way to get it done in a timely manner. Any Agent should be glad to come give you the interview with them to find out if you sense they have the capability and it will be enough to proceed with your business dealings.
In short, the primary differences are defined by 1 to 4 units, single Family dwellings, it’s considered residential property. anything more than four units or a property that is primarily used for business commerce, is classified as commercial and will have a totally different set of disclosures and liabilities.
Their are many differences. Number 1. the forms are much more simplified. Commercial Real Estate is complicated but has not had the litigation that residential real estate has making the deals more streamlined. To whomever is asking: Are you interested in purchasing commercial real estate? I have had commercial real estate deals close in 30 days.
All good info on the responses below. If I can add anything residential lending is driven not only by the value and condition of the collateral property but also the credit, ability to repay and often assets of the borrower. While these are all important factors in commercial lending often more emphasis is put on the collateral property, it's value, use and revenue stream.
Yes, there are major differences between residential and commercial. Commercial is a property that has more than 4 units. It can also be mixed use. i.e. an apartment unit on the 2nd floor and a commercial store front/retail on the bottom. As long it has a commercial component in it, the building will be considered commercial. Also the building should have an allowed use for commercial purposes. i.e. CMX1,2,34(in the city of Philadelphia).
Another major factor is financing. The process is generally longer. However, with the right property, buyer and commercial lender, you can close commercial loans in under 45 days with as little as 5% down. Also commercial loans do not go on your personal credit report. Residential loans do. In residential, you are limited to the amount of loans you can take out. With commercial, you have can as many loans you want as long as you or the entity qualifies. Lenders will look at the 4 C's(cash, credit, collateral and competence). If you have all of those lined up, you are good to go for a commercial loan. Also, if you are purchasing a commercial property and it is already generating income, lenders will factor that income to qualify for the loan. There are many nuances and technicalities involving commercial real estate. Once you get the hang of it, it is a great source for residual income and helps build wealth in the long run.
Commercial valuation for appraisal purposes is a more complex process. It usually involves the analysis of financial statements as the value of a commercial property is dependant on the property’s ability to generate income. As a residential report usually costs $300-$600 a commercial one can be several thousand depending on the complexity of the property.