I am interested in “flipping” of commercial properties. I have done residential and would like to know if there are different forms required, different rules, etc.? Can I assume I do NOT have to be a licensed Broker?
In general, the regulatory process for flipping commercial properties is much less burdensome than for residential properties. The philosphy is that an investor in commercial properties is a knowledgeable individual so the buyer beware protections are not as onerous. That being said, each state has its own regulations regarding real estate investing so it pays to know your state’s regulations.
If you intend to own an income property investment for a short period of time, it pays to understand the financing requirements. Most all commercial mortgages come with prepayment penalties that complicate a quick flip. Also, most lenders are suspicious of, quick, large increases in value so your buyer may have problems in getting financing for their purchase. There needs to be a “story” that justifies the quick increase in value, such as property rehab or leasing previously vacant space.
That being said, I know many people who do quite well flipping commercial properties. I also know people who lost money because they did not understand their investment.
James is right. I have helped several clients obtain commercial funds and they carry some pretty hefty prepays.
Financing for commercial properties are a little tougher than residential properties.
Appraisals are at least $1500. You have to be careful that there are no EPA issues.
Expect an in depth analysis of your finances.
Underwriting takes months instead of weeks.
I am not saying this to make commercial investing look bad. I just think that you need to know what you are going to be confronted with.
Good Luck!