Are there any disadvantages to paying cash for a commercial property?
I'm 2 years away from paying off my home mortgage ($25k left) and am about to purchase a $280k commercial property. 

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My home mortgage is $1200/mo and the commercial mortgage will be $1800/mo, so the combined total of $3000/mo is a big burden.

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I was considering refinancing my house and using the cash to pay for the commercial property in full, with cash. The result would be just one loan and just one mortgage payment of around $1200 again and I would get all the tax advantages and lower interest rates of a home mortgage, so it's better debt to have. 

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However, I'm not sure if, tax wise, it's better to have commercial debt so that it can be written off and will ultimately benefit more than the advantages of having it in a home mortgage only. 
[{"id": "e7ehvl9", "text": "There\u2019s no advantage to debt in and of itself, there are advantages to leverage. \n\nIs this land?  Or vacant property?  Otherwise it shouldn\u2019t matter too what the commercial mortgage payment is, if it and all other expenses are more than covered by the income. If they aren\u2019t, what are your plans? They might have more of an impact on which way to go. ", "replies": [{"id": "e7ei9gn", "text": "It's a small office building with several offices that I would be leasing out to tenants.   \n\n\nInitially there will be 0 tenants so 0 income. Income will probably eventually cover the costs, but there's always the chance that it doesn't if we have a hard time finding tenants. ", "replies": [{"id": "e7ej3o6", "text": "How much cash do you have without refinancing your house?  If you are able to get a loan on a vacant office building, it will be at a much lower LTV anyway. So cash from home refinance or HELOC might be your only option ", "replies": [{"id": "e7elo27", "text": "The bank already said they're willing to do the second loan.\n\n&amp;#x200B;\n\nI have about $50k of cash and enough stocks to make the down payment for a second loan. \n\n&amp;#x200B;\n\nNot sure what you mean about the 2nd loan being a lower LTV (Long Term Value?). ", "replies": [{"id": "e7ewy5l", "text": "Loan to value ratio", "replies": [], "depth": 5}, {"id": "e9w6uxh", "text": "I kniw this thread is a bit old now, but if you're still learning I recommend Poorvu's book \"The Real Estate Game\"\n\nhttps://books.google.com/books/about/The_Real_Estate_Game.html?id=9Io9IBhCMBwC&amp;source=kp_book_description", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "e7emai1", "text": "If you refinance your primary then you will only be able to deduct the interest if your itemized expenses exceed the new, larger standard deduction.  There might be something about using the primary residence money for a business purpose but you would have to consult an accountant. The mortgage on the commercial property is fully deductible. The rate will likely be lower on your primary residence but the whole point of commercial loans are for the rent to pay for the mortgage. The only advantage to paying cash for commercial property is if you can get a better deal from having less contingencies on the contract and a shorter time to close. However, even if I bought a commercial property with cash, I would refinance right after the purchase. Hope this helps.", "replies": [], "depth": 1}, {"id": "e7equ44", "text": "You\u2019ll be giving up leverage which dramatically increases your returns.  If you\u2019re concerned about the level of debt and don\u2019t have the risk tolerance for that then just use less of it.  I would still recommend at least 50% leverage otherwise your gonna kill your returns and might as well go invest in bonds or stocks.", "replies": [], "depth": 1}, {"id": "e831h3r", "text": "In basic terms, you pay slightly less without interest, but you lose leverage. That money that you spent could have allowed you to purchase a SECOND property, and you could be controlling 2 properties. It costs more, but you're now making income on 2 properties, lowering risk a little bit etc. That way you are able to use the same money twice, in a way. \n\nIt's really more complex than this, but this is the simplest way to put it. ", "replies": [], "depth": 1}]