Hannah Hammond says multifamily properties are the easiest entry to commercial real estate. Properties with 5+ units qualify as commercial and let you diversify rent across multiple tenants, reducing income risk compared to single-tenant buildings.
Chapters
The easiest way to get started in commercial real estate would be to get started in multifamily, because that's kind of the bridge from residential single family homes to commercial buildings and assets. A multifamily that's four units or less is considered a residential home. Same lending as you would be buying your own, and five units and more is considered a commercial property. If you're buying a residential home, you make your money on the buy. You want to buy low, sell high, and force appreciation into it by adding value. It's lower risk, in my opinion, because let's say you have a 15 unit apartment complex and a couple people don't pay rent, well, you still have all those other streams of income. Whereas if you have a restaurant and the restaurant owner doesn't pay rent, well, now you have an asset that has zero income coming in.