How much you need to start investing in commercial real estate?
So, you’re thinking about commercial real estate. Maybe you’ve dreamed of owning office buildings, shopping centers, or apartment complexes—but then reality hits:
“How much money do I actually need to get started?”
Here’s the truth: you don’t need a fortune to step into CRE. You just need the right strategy, a little courage, and a willingness to learn. Let’s break it down.
What is Commercial Real Estate
First, let’s clarify what Commercial Real Estate is:
Office buildings – From small local buildings, some are mixed use to tall towers.
Retail – Strip centers, big box, restaurants, mixed-use buildings.
Industrial properties – IOS (industrial outdoor storage)- Warehouses and distribution centers.
Multifamily apartments – Buildings with 5+ units (yes, technically commercial!).
Specialty properties – Hotels, storage units, medical offices, and more.
Within these asset classes, there are subcategories to describe a property's quality, location, age, and amenities, which determines its rental rates and investment potential:
CLASS A- Class A Properties -The highest quality buildings in the market-often newly built or recently renovated-Located in prime areas, like major downtown districts or high-demand commercial corridors.
CLASS B- Slightly older than Class A, usually 10–20 years old-Located in good but not prime areas-Still solid quality but may need minor updates.
CLASS C- Older buildings, often 20+ years old-Located in less desirable areas or neighborhoods with lower demand-Basic construction, fewer amenities, and more deferred maintenance.
Each type has its own costs, risks, and ways to get started. The key is finding what excites you—and what fits your budget.
The “Traditional” Way: Buying with Cash or a Loan
If you’re going the classic route, here’s what to expect:
Down payments: Typically 25 to 35% of the property price.
Closing costs: Around 2–5% of the property price.
Reserves: Lenders usually want cash in the bank to cover 6–12 months of expenses, or an ingoing Net Operating Income that is at least 120% -125% of the debt service.
Tenant Improvement Costs for Office, Retail- can vary depending on need of the new tenant
For example, a $1 million office building might need $350,000–$400,000 upfront. Sounds like a lot—but that’s just one path.
Creative Ways to Start with Less Money
Here’s the exciting part: you don’t need hundreds of thousands to get in the game. These options let you start small, learn the ropes, and grow your portfolio:
1. Syndications
Team up with experienced investors and pool your money for bigger deals. Minimums often start around $25,000. You get passive income while someone else with a proven track record manages the property.
2. REITs (Real Estate Investment Trusts)
Think of REITs as buying a slice of commercial real estate without owning a building. Public REITs let you start with as little as $500.
3. Crowdfunding Platforms
Platforms like Fundrise or CrowdStreet let you invest in commercial projects with smaller amounts, maybe $5,000–$25,000. It’s a modern way to get your foot in the door.
4. Partnerships
Partner with friends, family, or colleagues to pool resources. You can contribute money, skills, or even sweat equity—and share in the profits.
Don’t Forget the Extras
Buying Commercial real estate is more than just the purchase price. Keep these potential costs in mind when underwriting the investment:
Renovations & repairs
Property management fees (usually 4–10% of rent)
Insurance & taxes
Vacancy, lease-up costs & other unexpected costs
Planning for these will save you headaches later—and help you grow sustainably.
How Much Do You Really Need?
Here’s a reality check: commercial real estate is achievable, even if you’re not a millionaire.
The most important thing? Start where you are. Even a small investment today can become your steppingstone to larger deals tomorrow.
Your CRE Journey Starts Today
Commercial real estate isn’t just for big players—it’s for anyone willing to learn, take smart risks, and dream big. Start small, stay consistent, and grow your knowledge and portfolio over time.
The first property, the first deal, the first investment—it all begins with one step. And once you take it, you’ll be on your way to building real wealth that lasts.
“Start where you are. Use what you have. Do what you can.”
Your commercial real estate journey starts now. Why wait?
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