How large of a down payment is required for a commercial real estate purchase?

The amount of a down payment required for a commercial real estate purchase in Virginia varies depending on the type of property. Generally, the buyer must make a down payment of at least 10-20% of the total purchase price. This is in comparison to residential real estate transactions, which usually require a down payment of at least 3.5-5% of the purchase price. The down payment for commercial real estate transactions in Virginia is typically higher due to the additional risk that lenders may face. Since commercial real estate typically involves more money than a residential purchase, the lender takes on a greater financial risk if the buyer defaults. Consequently, they expect a higher down payment to be made in order to offset some of the risk. In addition, commercial real estate purchases often require the buyer to obtain a loan or line of credit in order to complete the purchase. These loans will also typically require a down payment of some amount. Depending on the loan type, this down payment can range from 10-25% of the total purchase price. Overall, the down payment required for a commercial real estate transaction in Virginia is typically higher than that of a residential transaction. In order to obtain financing, the buyer should plan to make a down payment of at least 10-20% of the total purchase price. Additionally, if a loan or line of credit is needed to complete the purchase, the buyer may need to make an additional down payment, which can range from 10-25% of the purchase price.

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