Many people looking to invest in commercial real estate in Florida seek to put their money into multifamily properties. If you count yourself among those looking to invest in this type of commercial real estate, it pays to understand the down payment process and how it might differ from that associated with purchasing a traditional home.
Per Rocket Mortgage, you need to make a bigger down payment on a multifamily property than you would a traditional, single-family home.
Down payments and conventional loans
How much you have to put down on a multifamily property often depends on how many residential units the property in question has. If, say, you are looking to buy a duplex that has room for two families and seek a conventional loan, you should expect to have to put down at least 15% of the building’s cost for your down payment. If the property you are looking to buy has, say, four residences inside, you may have to put down at least 20%. If you do not plan on living in any of the units, yourself, you may have to put down at least 25%.
Down payments for FHA, VA loans
Things work somewhat differently when it comes to FHA and VA loans. You may be able to put down as little as 3.5% for a multifamily property through an FHA loan. If you qualify for a VA loan, you may be able to buy a multifamily property with as many as four units without making a down payment at all provided you plan to live in one of those units, yourself.
Investing in a duplex or small apartment building may offer many benefits, including a broadened real estate portfolio and a reliable passive income stream.
