Closing costs and how to factor them into the investment decison

[Steve Johnson]

Good Afternoon Investors,

I am a new investor and am assembling the pieces in preparation for my first deal. My question is about closing costs and how to factor them into the project cost total. I understand that closing costs are made up of 2 main areas: one time fees and prepaid/escrow items. When adding closing costs to the total project cost, is it correct to add both the one time fees and the prepaid/escrow items or should I just be factoring in the one time fees since the prepaid/escrow items are essentially recurring charges that will be expensed monthly below the revenue line? It makes a material difference in the ROI calculation if done incorrectly, which is why I ask. If anyone can assist with this question I would appreciate it.

Steve