1st Commercial Property


New Forum Member
Recently sold all my residential properties and looking at my first commercial with 6ish units. My only experience is with the residential house/duplex type and wondering if there are any watch outs or significant differences when stepping into the commercial side oo a small building. Looking at maybe a 6-8 unit building or large multi family style property but its zoned commercial. I've heard that insurance, financing, taxes, etc are all much higher. Is there anything else on the commercial side I should be aware of or any unique clauses to put in an offer if I decide to move forward? I'm used to the 20% down, assuming tenants type of stuff but never ventured into the commercial side and thought I'd ask before getting too deep.

Appreciate any thoughts or ideas

Thomas Beyer

Senior Forum Member
REIN Member
20% down unheard of in commercial and MF.

Budget 30-35%. If you’re lucky and asset has high proven income you may get 75% LTV but it’s quite rare.

Higher upfront fees for appraisals, inspection & environmental reports, legal (2x) and mortgage fees.

For commercial with tenants (say office, retail or industrial) lease analysts is critical as is strength of tenant.

Be aware of rent control laws for MF but no such laws for commercial. Leases in commercial often 5, 10 or 15 years so understand the implications of that and who pays for what. Triple net? TIs? Understand all that.

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Ivan Sabourin

New Forum Member
REIN Member
Just putting in my 2c

Calculating the value of commercial property is very different then residential. The value is based on cap rate and leases in place. You have to understand this well.

I find commercial quite fun and I feel it has more potential and less risk - that is entirely my opinion. With this caviet - if you don't buy right, have leases that are ending or open to cancel, or old equipment that has never been serviced, then the fun ends very very quickly.

...anyways, finding a mentor or other investor who holds property that you want - would be a good "friend" to make. Even if they don't provide any information to you directly, just listening to their trials and tribulations will give you lots of insight into the commercial game.


Senior Forum Member
REIN Member
Your best option for a 6 plex is to go with a residential mortgage with RBC. They will qualify you with a blend of your own income/rental income. Your closing costs will be a fraction of a commercial mortgage without the need for all the costly reports and fees. You can also borrow at 80% loan to value.