Buying a property with little or no money down.

by John Burton
(Windsor, Nova Scotia)

I live in Nova Scotia near the town of Windsor. I have been wanting to invest in real estate to help with retirement planning. I have my eye on a commercial property in Windsor with two apartments above the commercial space (it is a three story). Historically the spaces have rented for ~$1950 per month.

The property is about 140 years old and needs an estimated 40 to 50 Thousand in upgrades (this estimate is from a local Realtor). The property is listed for $124,000.

My principle residence has ~$125,000 in equity in it right now. My question is Can I use the equity from my home to act as the down payment? I don't have 20% to put down on the property so I was wondering if equity counted.

Thanks!

John.

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Apr 15, 2014
RE: Buying a property...
by: Tom Karadza

Hi John,

Thanks for the question!! We still need to make it out to Nova Scotia, we hear it's beautiful!!

We're not mortgage brokers or a bank so you'll want to confirm what we're about to say...

Typically the banks want to see that the money used for a down payment is NOT coming from a credit line.

The rules are always changing though. I'd just come out and clearly ask the bank or mortgage broker what is accepted and what is not - that's your best bet.

So we know this isn't an official answer but hope it guides you in the proper direction...

Tom.

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