How to Buy Commercial Property in 2025: 7 Smart Steps for CRE Investors

Investors who “trust the process” are more likely to snap up the best deals.

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Figuring out how to buy commercial property that actually generates returns in today’s market can be like climbing a mountain in unpredictable weather.

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One minute, the sun seems to be shining on a promising deal, the next, a storm of rising interest rates or shifting upfront costs rolls in to ruin everything.

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Yet not cracking this code means missed investment opportunities as prime properties are acquired by rivals.

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Investors who miss out are forced to consider less desirable deals with reduced potential, settling for lower peaks and reduced rewards. They watch as others reach the summit, planting their flags on valuable assets.

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A smart investment strategy can be the springboard investors need to clear these obstacles. With the right approach, higher-value properties and more lucrative returns come into view. 

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But just how do you put the right plan together to conquer the challenges of CRE purchasing today?

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This guide provides everything you need to know about how to buy commercial property you’ve been targeting and to take your investment portfolio to the next level.

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Contents

1. Is it smart to buy commercial real estate
2. How to buy commercial property: A 7-step guide
3. How much do you have to put down to buy a commercial property?

To buy the right commercial property, you must have the right funding. Find out how Duckfund's equity funding can help you land that commercial property you’ve always wanted.

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Is it smart to buy commercial real estate?

Working out whether it’s a good idea to purchase commercial real estate right now is the question on every investor’s mind. 

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Yet despite a daunting market, savvy investors know that looking for CRE property or commercial land to buy is never a bad idea if you get the fundamentals right, like excellent timing and the right price.

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What’s more, many CRE experts are saying now is the time to make the move. 

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JP Morgan points to falling interest rates and cheaper, more accessible debt financing options as the drivers behind rising transaction prices in 2025 and beyond. They cite high occupancy rates and demand as reasons for the momentum to continue.

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The rise in CRE pricing at the end of 2024

Source: JP Morgan

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What’s more, JP Morgan mentioned how commercial real estate property resilience means that strong gains are likely even during economic downturns. They cite the sector’s performance during the dot-com bubble and the COVID-19 pandemic as evidence of this.

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Source: JP Morgan

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However, the report also stresses one vital imperative: to strike while the iron is hot or to make the most of cyclical lows, in other words.

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Commercial real estate investors who know how to buy commercial property quickly will capitalize on CRE price surges in a potential coming upswing and gain the most.  Indeed, the window for buying at cyclical lows may be closing rapidly.

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How to buy commercial property: A 7-step guide

Commercial real estate investing holds a lot of lucrative potential, but buyers must follow a structured process, be it their first commercial property purchase or one-hundredth. 

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So, what are the steps of purchasing a commercial property effectively? Here’s a seven-step process that every CRE investor should take when buying a building for business.

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1. Define your investment criteria

Commercial real estate deals run a lot smoother when the investor knows exactly what they want from their new property. 

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The obvious starting point is to work out the best asset class or type of property for their situation. Office buildings, retail spaces, and industrial properties all look promising, according to the World Economic Forum (WEF), for example, while Freddie Mac predicts a positive long-term outlook thanks to multifamily marketing trends, falling supply levels, and changing demographics.

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The falling supply of multifamily (2024-2026)

Source: Freddie Mac

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Other obvious factors like budget levels and the desired cash flow and return on investment are things to consider, yet many investors overlook the short-term viability of the property and its surrounding areas.

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 Zoning laws and local market dynamics (like demand fluctuations) can impact the success of an investment and can even torpedo it in extreme cases. 

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Having a good understanding of all the above is a vital foundation for purchasing a commercial property and making it a success.

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2. Find a qualified commercial real estate agent 

A great real estate agent is worth their weight gold. She or he must know the nuances of the commercial real estate market, how it works, and how to identify promising opportunities before investors get wind of it. 

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Not only that, but an excellent realtor will negotiate on your behalf to get the best deal possible. Their network should also include an effective real estate attorney and broker who will pitch in with their skillsets.

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This investment team that knows how to buy business property doesn’t come cheap, but investors who have them end up saving much more in the long run, avoiding costly mistakes and maximizing their return on investment.

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3. Secure financing (including earnest money)

Many investors rush into a commercial property purchase without the right finance behind them, but this is a common mistake. As Aviva Sonenreich, managing broker of The Warehouse Hotline, puts it, “What’s the point of shopping if you don’t even know your budget?”

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“Applying for financing before shopping can not only save time but also protect you from disappointment, “ she adds. “Moreover, securing financing ahead of time allows you to close the deal much faster once you choose the right property.”

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Commercial real estate loans or commercial mortgages from traditional lenders like banks and the Small Business Association (SBA) are still out there, but many seem determined to reject as many applications as possible. 

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Alternative financing options, like Commercial Equity Lines of Credit (CELOCs) and Gator lending, are moving into this funding gap. These tend to have lower lending criteria, lower rates, and a faster application process than banks. 

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They also often have more flexible repayment plans and refinance options than traditional options.

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Many also specialize in overlooked funding areas like earnest money funding. 

Also known as a good-faith deposit, earnest money demonstrates a buyer’s commitment to the deal and can help seal a deal ahead of rivals. 

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Investors who put down a quick down payment are much more likely to win out.

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4. Conduct thorough due diligence

Due diligence is a little like performing a thorough medical checkup. Without it, an investor risks uncovering hidden problems after it's too late, which often leads to financial distress and the pain of a bad investment.

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But what does due diligence entail? Here’s a quick checklist:

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• A full inspection of the investment property, including its condition, potential for renovations, and long-term viability
• A review of the property’s financial records, such as income statements, expense reports, and tax returns.
• Market data analysis, including comparable sales, vacancy rates, and demographic trends.

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The better the picture an investor can paint with this process, the more likely successful the purchase is likely to be. 

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5. Negotiate the purchase agreement

A key part of knowing how to buy commercial real estate is negotiating a purchase agreement.

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Once the investor is certain that they have the right property and funding, they’re ready to move onto the purchase price and terms. 

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This is where a good real estate attorney really gets the chance to shine by protecting their client’s interests and making sure the agreement is sound.

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6. Close the deal

Speed is key here. Until a deal is closed and signed, the seller is free to back out of the transaction, which can incur high costs. 

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An attorney will help finalize the paperwork, transfer ownership, and quickly disburse funds, all while making sure legal demands are met.

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7. Develop a property management plan

Figuring out how to purchase commercial property is just the start. The best investors have a solid property management plan in place, including who manages the premises, who acquires the tenants (if rented out), and who’s responsible for maintenance.

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Often, poorly planned investments leak money from the minute the deal goes through, with unexpected costs mounting up. 

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Effective property management plugs these holes and sets the investment up for long-term success.

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How much do you have to put down to buy a commercial property?

Figuring out how to buy commercial property involves knowing how much you must put down to secure it, and this depends on several factors.

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Commercial real estate loans typically require a larger down payment than residential real estate. Lenders will consider the type of commercial real estate (office space and shopping centers will differ greatly, for example), the property's value, and the investor’s creditworthiness. 

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Owner-occupied properties sometimes qualify for more favorable loan terms. While some commercial real estate deals might require a down payment, others may offer different financing structures. 

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An expert like a commercial real estate broker can help buyers through this process, including looking at earnest money vs. down payments and how they differ, plus finding the right financing solution to make sure the investor has the money to bridge this gap. 

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Other costs associated with a real estate purchase, such as closing costs and due diligence expenses.

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To follow a general rule of thumb, however, the down payment on a commercial property is typically between 20 and 35% of its value, with earnest money coming in at around 3 to 5% on average.

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Commercial investors, whether first-time beginners or established property business owners, must make sure they have this funding to hand before proceeding with the next deal. 

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Ready to secure your next commercial deal with Duckfund’s equity and debt financing? Take the next step in growing your real estate portfolio, and contact us today.