Learn Me Buying Shop Space

I have at least a dozen cars and a 1.5 car garage. There's a 1800 sq ft shop/commercial building for sale in town with a good location. I have bought houses a few times and had a rental property for a few years, but know very little about commercial property. What do I need to know?

I just want it for personal shop space, but are there tax and finance benefits to setting up the ownership and purchase a certain way?

I have about 1/3 of the asking price in savings (invested in stocks and not part of retirement funds). What is the smart way to finance it?

What pitfalls do I need to look out for?

Pics, more info and more questions after I get a look at it during the week.

Make sure you aren't buying an underground storage tank or toxic waste mitigation issue. 

I think someone pointed out in another thread that with a place like that, you're looking at commercial insurance policies which tend to be a lot more expensive than the usual residential ones. Get a quote first.

Zoning laws will come in to play, so it's worth checking that out.  If you aren't operating a real business you can very easily fly under the radar of course.

Be prepared with various organizations not being set up to understand that you're not a business.  Local government, insurance companies, etc.  And even though you're not a business, the fact that you're in commercial zoning will give you requirements that your home doesn't have.  In my locality, I have to let the fire department do an inspection every year.  Talk about people that don't understand that I'm not a business!  That also means I have to have a flammables cabinet, the right type/age/number of fire extinguishers, egress signage, proper electrical, etc. 

Utilities will be more expensive because commercial.  And you'll probably need to put down a deposit.

Insurance can be a little tricky - there isn't a policy for personal workshops, so you might find yourself in a grey-area with an umbrella policy and your homeowners.

Some localities will tax commercial properties different from residential.  Some will also require that you give a key to the fire and or police department.

I think just for the liability standpoint just set up a LLC and do it all through that.

Start a car storage business? You might end up saving money on insurance and it will be a business expense. You could then qualify as an owner occupied business property and get into it under and SBA loan for 10 or 15% down. Those were the first things that popped into my head, don't know if they are feasible. Lose money for a few years and shut the business down.

Besides zoning, there can also be "Land Use" rules that overlay the zoning. For your use I don't think you will have any problem but it is something to think about for when you want to sell later.

Thanks for the input. I decided against it after looking into the details more. My conclusion was that I can build onto my current garage for a lot less money and hassle. The SBA loan under 7A looked like a good option, but going through all of the steps of starting an actual business right now is beyond what I have the time and commitment for. I also found the option of a 'Mixed Use Mortgage' which looked a little simpler, but in the end did not make financial sense compared with adding on to what I have.