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I'm a brand new RE agent and have done now about 4 buyer transactions over the course of a year since I have had my license in the state of PA. All of the transactions are residential buyer transactions where I myself purchased SF homes and now rent them out.
I want to purchase a commercial building in downtown Lancaster that is currently mixed usage. The downstairs was being rented by a law firm, and the upstairs had two residential units being rented out. I want to turn it into an Airbnb and also use it for my own personal office space. It's a little over 3k sq ft and I want to put in a bid next week for an all cash deal. Listing price is 600k but it's been on the market for a while so I will offer below ask.
I've heard commercial is so different of a business from residential. I have my license so obviously I want to do the deal myself and collect the 3% commish.
Is there anything I need to know that might be different from the buyer side of a commercial deal? Is the offer process the same with residential? Anything that is different would be great to know, esp before I go speak with my brokerage firm and ask them as well. Thanks in advance for suggestions.
Seriously. 3% is small potatoes compared to the value an experienced commercial broker would bring to the table.
Have your broker recommend one and ask for a 20% referral fee.
If you are up against an experienced commercial broker on the other side of the table, you may find they won't even take a residential broker seriously.
OK Thanks Mike. Plus, it's not like these buildings are 20 or 30 years old. They are all over 100 years old and I have concerns about zoning and doing Airbnb and such.
I'm a brand new RE agent and have done now about 4 buyer transactions over the course of a year since I have had my license in the state of PA. All of the transactions are residential buyer transactions where I myself purchased SF homes and now rent them out.
I want to purchase a commercial building in downtown Lancaster that is currently mixed usage. The downstairs was being rented by a law firm, and the upstairs had two residential units being rented out. I want to turn it into an Airbnb and also use it for my own personal office space. It's a little over 3k sq ft and I want to put in a bid next week for an all cash deal. Listing price is 600k but it's been on the market for a while so I will offer below ask.
I've heard commercial is so different of a business from residential. I have my license so obviously I want to do the deal myself and collect the 3% commish.
Is there anything I need to know that might be different from the buyer side of a commercial deal? Is the offer process the same with residential? Anything that is different would be great to know, esp before I go speak with my brokerage firm and ask them as well. Thanks in advance for suggestions.
Talk to your broker. They can answer all of your questions.
OK Thanks Mike. Plus, it's not like these buildings are 20 or 30 years old. They are all over 100 years old and I have concerns about zoning and doing Airbnb and such.
You need to ascertain the zoning and allowable uses before you drop 600 large on any building.
Since the buildings are over 100 years old you also need to determine if there are any current, or even proposed historic preservation restrictions. There also might be design standards/appearance or materials requirements for rehabbing or remodeling the exterior.
The above are in addition to the standard inspections.
OK Thanks Mike. Plus, it's not like these buildings are 20 or 30 years old. They are all over 100 years old and I have concerns about zoning and doing Airbnb and such.
I moved to NC from Lebanon, PA in 1997.
I'd be pretty careful with downtown commercial stuff.
Like North Beach says, there's a lot of history to consider.
Talk to your broker. They can answer all of your questions.
Your broker may be able to help you with it. If your broker doesn't have experience then listen to Mike and get a commercial agent and ask to shadow and learn from them as you go.
Commercial has less disclosures requiremnts from the seller, caveat emptor! If you're paying cash no problem, as obtaining commercial loans are very different as well.
OP, you said that the units were occupied? Are they vacant now? If so, you need to go yourself to the proper offices in that city and ascertain the zoning and allowed uses. Hiring a commercial broker is a good idea, and it is also to have a good local real estate lawyer on your side, but checking on zoning and allowed uses is something you need to do yourself. I have had past experience in this area and I would not trust either of those two to get this information for you. In some of those small PA towns, if the property has been vacant for a certain period of time or longer, buildings are automatically down zoned, meaning you might only be able to rent to one tenant instead of two, or two tenants instead of three or four. So you can't count your cash flow until you find out the town rules. Good luck.
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