commercial investment vs residential

To all of you experienced investors…

I know all about the financing aspects of real estate but one of the main reasons I am on this site is to learn other aspects. I am looking to buy investment property in the near future and was wondering if I should go residential or commercial. I have private investors for the down payment on commercial, but I was wondering if there was a preference and why? I know it all comes down to cash-flow and each deal has to be looked at seperately whether it be residential or commercial, but if you had the money…which would you choose? I’m assuming the answer will be “the one with the best cash-flow” of course, but what if they were cash-flowing the same. I hope I’m being clear enough. Any input would be great.

Personally, I would start small with a couple of single families and get your feet wet with property management…if you haven’t had the ‘pleasure’ of tenants, my advice is to start small!


LOL. Your a sick man Kieth.

Luckily, I’m on my best behavior here!


...if you haven't had the 'pleasure' of tenants, my advice is to start small!

AMEN! Keith is right as usual!!!

I tried my hand at property management on the OSU campus… I no longer like people. :-[

You guys are killing me – “I no longer like people.” hahahahaha

I’m with Keith, like always. I would start with a small house and see how you like dealing with tenants. If you find that you don’t want to burn them at the stake each time you receive a call for something as silly as, “The outside light is shining in my bedroom,” you’re probably ready to step it up ;D BTW the answer to that one was, then close the blinds that came with the house! I’m not sure if they wanted me to call the city and have the lamp post removed.

Good luck to you.

You’re just not sarcastic enuff Tami!

That converstation should have gone like this:

Tenant: “The outside light is shining in my bedroom”

Hastedt: “Do you own a shotgun? I recommend #1 Buckshot or larger”…


Tenant: “The outside light is shining in my bedroom…”

4EEM: “Your rent is 5 days late. The late fee is $15.00. I’ll be back tommarow morning. 8:30 OK?”

Buckshot often works for that too…(did I say that???)


See no… Hear no… Speak no…

God this day is going so slow. I’m in “negotiation phase” on a commercial property down in cinci… Some slime balls are trying to rip off a client, but the client still wants to “think about it.” I’ve got 4.2 Mil in this months pipe and it was smokin for a min., now I’m sitting on my thumbs.

I’m cranky… Anyone need me to make some collection calls? lol

All of my tenants are paid up (as is the norm…)


Dealing with commercial versus residential is very different, not just the cash flow. When businesses get into trouble, the people will pay their rent at home and skip the office rent. The expectation of maintenance and management is greater on commercial, when the light bulbs burn out in their office thy call you, residents go to Wal-Mart and buy some bulbs. It is a lot more difficult to screen a commercial tenant versus a residential tenant. When you have to stop by to collect from a deadbeat tenant, you may not be able to catch them because you don’t know what hours they are keeping, residential usually come home eventually.

Thanks for the fair warning guys! :-X

Bluemoon…I was referring to an apartment building vs 1-4 unit homes. I have no intention in landlording any business property. Thank you for your input though, I appreciate it.