How Much Is Required As a Down Payment to Buy a Multifamily Building?

How Much Is Required As a Down Payment to Buy a Multifamily Building?

Typically a down payment of 25 to 30 percent is required for a multifamily building. This translates into at least $250,000 for a $1 million building or $500,000 for a $2 million building.

Just like traditional mortgages, multifamily mortgages can be structured for different lengths of time and for different interest rates. Unlike traditional mortgages, building management experience plays a much greater factor in the bank's decision to loan.

Typically multifamily buildings are organized as limited liability corporations to protect the owner's other assets in the event of a large legal issue with a tenant or the with the building. It is important to consider bankruptcy contingencies and loan-related fees when making a decision.