One common question that clients have is how much do I need as a down payment to purchase a commercial property?

The quick answer is that usually lenders asks for 25% to 35% of the purchasing price as down payment. But you maybe able to finalize deals  to purchase commercial property with as low as 10% down payment. There are several strategies that can be implemented to lower the money required as a down payment to purchase a commercial property. 

Some of these strategies include: from getting the lender to accept a VTB from the seller as part of the down payment or using your existing  real estate portfolio or getting CMHC insurance and many other.

The down payment required may also vary depending on the property that you are purchasing. For example, the down payment for purchasing an income generating property that shows a good profit return can be very different from the down payment required to purchase an industrial unit. 

Location is also another factor that could decrease or increase the down payment required. Based on the location of the commercial property that you are looking to purchase you may have more lenders interested in providing you with a commercial mortgage and the more lenders you have interested the more you can negotiate a lower down payment.  

Send us few details on your next deal and let us provide you with some suggestions on how to get the ideal down payment for your purchase of any commercial property.

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