Commercial Real Estate Investment With a Low Down Payment: What's Actually Possible in Canada
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Ask most people how much money it takes to buy a commercial property, and you’ll hear the same answer: a lot. The common belief is that commercial real estate is only for the wealthy, the incorporated, or the already-invested.
For a long time, that was mostly true. But a specific type of commercial investment has quietly changed the entry price — and the down payment can be far lower than you think.
Here’s what’s actually possible, and what it takes to qualify.
Why commercial real estate usually needs so much money down
A conventional commercial mortgage in Canada is priced for risk. Lenders typically want the borrower to put down 25% to 35% of the purchase price — sometimes more for higher-risk asset types like retail or office.
The logic is simple: if a business tenant leaves an office or storefront, that income can disappear overnight, and the lender wants a large equity cushion. So the down payment stays high, and the entry price stays out of reach for many investors.
That’s the version of commercial investing most people picture. But it isn’t the only version.
The one type of commercial property that breaks the rule
In Canada, once a residential building has five or more units, it’s financed as commercial real estate — even though it’s full of people renting homes, not businesses renting storefronts.
This matters, because a small apartment building has something an office tower doesn’t: diversified, essential-need income. If one tenant leaves, seven others are still paying, and housing demand rarely vanishes the way commercial tenancy can.
Lenders and Canada’s national housing agency recognize this. That’s why multi-residential rental buildings can be financed on far more favourable terms than any other commercial asset — including a much lower down payment.
How the down payment drops to as little as 5%
The vehicle is a federal program called CMHC MLI Select. When a qualifying multi-unit rental building is insured through it, an investor can access financing for up to 95% of the value — which means a down payment as low as 5% on a commercial-scale property.
Put that in perspective. On a $2 million building:
- A conventional commercial mortgage might ask for $500,000 to $700,000 down.
- A qualifying MLI Select purchase could require closer to $100,000.
Same building. A fraction of the cash to get in. That single difference is why so many first-time commercial investors are entering through multi-residential rather than office or retail.
(For the mechanics of how loan-to-value works, see our guide on [buying with as little as 5% down], and for the exact down-payment breakdown, see [how much down payment MLI Select requires].)
What a building has to do to qualify
A low down payment isn’t automatic. The building has to earn it by scoring points in the program, generally through:
- Five or more rental units in the project
- Energy-efficient construction that meets program thresholds
- Accessibility and affordability features where they apply
- Being purpose-built to rent, not converted or resold as condos
Brand-new, professionally built rental projects tend to hit these marks cleanly, which is why turnkey new construction is the most common path into a low-down-payment commercial deal.
The trade-off to understand
A smaller down payment means a larger mortgage, so the building has to produce enough rent to comfortably cover the loan. That’s why the numbers matter more than the pitch.
Before buying, a serious investor looks at whether the rent covers the debt with a healthy margin — the figure lenders call debt-service coverage. A strong building cash-flows from day one even with high leverage. A weak one doesn’t, no matter how low the down payment. (More on this in [the one number that decides your deal].)
Is a low down payment right for you?
Low leverage isn’t a trick or a loophole — it’s a federal program designed to encourage new rental housing. Used on the right building, it lets an investor control a valuable, income-producing asset without tying up several hundred thousand dollars.
The best way to know if it fits is to look at a real building with real numbers. Every project we represent comes with a one-page investor proforma showing price, income, financing, and projected cash flow.
Want to see a low-down-payment commercial deal in detail? Call Janak Singh Chhabra at (647) 999-0935 or request a proforma through the contact page.
No fee. No pressure. Just a conversation.
Frequently Asked Questions About MLI Select Rates
Is Edmonton a good place to invest in real estate in 2026?
Edmonton offers lower entry prices than Toronto or Vancouver, no rent control, and a historic wave of investment bringing jobs to the region. Those are strong long-term signals for rental demand, though every deal should be assessed on its own numbers.
What is driving Edmonton's job growth?
Major projects such as Meta’s data centre in Sturgeon County and Dow’s Path2Zero complex in Fort Saskatchewan, along with a wider cluster of AI, hydrogen, and logistics investment across the region.
Does Alberta have rent control?
No. Alberta does not cap the amount a landlord can increase rent, which gives investors more flexibility to keep rents at market, especially at tenant turnover.
Are these commercial or residential properties?
They are residential rental buildings with five or more units. Because of the unit count, they are financed as commercial (multi-residential) real estate through CMHC.
How do I get project details and pricing?
Request the investor proforma for any project. It provides a one-page breakdown of the building’s income, expenses, financing, and projected returns.
Janak Singh Chhabra
A licensed Realtor at TFN Realty Inc., Brokerage – and one of the few specialists in Canada who works exclusively at the intersection of pre-construction real estate and CMHC MLI Select multi-unit investments. Janak is a two-time Diamond Award winner at Bay Street Group — one of the most recognized performance awards in Canadian real estate — for 2023 and 2024. The Diamond Award is given to top-performing realtors who demonstrate exceptional results across transaction volume, client satisfaction and professional excellence.
Janak Singh Chhabra is a licensed real estate representative, not a mortgage broker or financial advisor. Market data and project figures are drawn from public sources and are subject to change. All investment figures are estimates for illustration. Buyers should verify financing with a qualified mortgage professional and complete independent due diligence before purchasing. E.&O.E.