Have you ever thought of owning your very own building? For novice investors, just the thought of getting into commercial properties may scare you away immediately … However, at some point, a residential real estate investor will start finding commercial properties quite attractive!

There are substantial differences when getting financing for residential properties than for commercial financing. To make it clear, any property with more than four units is considered a commercial property.

The process for buying a commercial property is also very different than purchasing a residential property, not just from the price point of view. There is a lot more due diligence that needs to go into buying a commercial property. In terms of financing a commercial property, the rules are completely different. For example, on the residential side, you will need 20% down payment where as for a multi-residential commercial building you can get a CMHC insured mortgage to as high as 85% LTV.  So this means that you only need 15% down payment to purchase the property.

I only talked about financing multi-residential commercial properties in this issue. There are so many different types of commercial properties such as strip plaza, industrial building/park, shopping mall, etc. that I haven’t even touched upon! Each type requires special knowledge in getting the best financing for them.

If you are interested in purchasing a commercial/residential property and need financing, please feel free to contact me for a free consultation session. I am also happy to assist you with any of your residential and/or commercial financing matters!