Experienced Kansas City Construction Law Firm

Differences in commercial and residential real estate

On Behalf of | Oct 20, 2015 | Commercial Real Estate, HOA

Kansas residents who want to make the switch from investing in residential real estate to investing in commercial real estate should keep in mind that there are a number of differences between the two. Many real estate investors begin by investing in the residential side of the market, so making the switch can be done, but investors need to be mindful of a few key points.

One of the major differences is that investors should be knowledgeable about the industry connected to the real estate. In other words, they need to know about the restaurant or retail or hospitality industry if they intend to purchase a building intended for those purposes.

Unlike residential property, commercial property is valued based on predicted cash flow. Residential real estate investors also need to learn a different set of profit and loss formulas as well as understanding concepts such as cap rates and loan to value ratios.

Commercial investors should be patient with the market rather than rushing to buy property simply because they have the money and should hold on to some of their residential real estate. They should also look at the long-term future of the property they are considering.

Commercial real estate can be a complex area, and both experienced and inexperienced investors may wish to seek legal counsel. In addition to assisting with contracts, an attorney may be able to deal with aspects such as zoning and taxes. Investors may have complicated development plans for a property, and an attorney may also be able to assist with construction negotiations. For example, an investor may wish to renovate a long-vacant property for restaurant use. It may be necessary to get zoning permission and to deal with various contractors regarding the needed renovations.

Testimonials

“Long & Robinson was in our corner from the beginning through the end, giving great advice and guidance, and working with us to bring our issue to resolution. Would highly recommend for construction representation.”

— Jeff Wasinger, Vice President – Haren Companies

Testimonials

“Burke Robinson and the Long & Robinson law firm were a pleasure to work with and were also excellent in every way. The firm fully supported a contentious claim, providing guidance and insight at every turn. Although it’s challenging for an organization, as the plaintiffs, to maintain a positive feeling throughout a lengthy process, Mr. Robinson and his team continued to offer encouragement with helpful legal analysis and reporting. A critical part of reporting and case management is a detailed review, understanding and strategy for the complex elements of a claim such as ours and Mr. Robinson demonstrated that in abundance. I highly recommend Long & Robinson to any organization that needs the same kind of legal team as we did.”

— Chris Durkin, Director – One Park Place Tower Condominium Association

Testimonials

“Burke has been absolutely amazing to work with. I feel we have a very unique situation that is rather hard to explain and put all of the pieces together. Burke has been amazing at assisting our HOA and addressing all of our questions in a quick and professional manner. If he doesn’t know the answer he finds it and responds quickly. I would recommend Burke to anyone in need of legal services. Our HOA is extremely happy we found him!”

Testimonials

“I was in the construction business for 40 years. In that time I have had the need for legal help a few times. This firm provided expertise and service that was light years beyond others law offices. We COULD NOT have done better. Thank you so much.”

Testimonials

“We looked at many options and selected Long Robinson based on reputation and our interviews. Burke Robinson has proven to be a great choice.”