Closing and Repair Costs

[Mike Celli]

Is there a good website that provides estimated closing and repair costs for apartment buildings based on size and location? I am using the calculators and finding it tough to estimate these variables. Thanks!

[Sam Grooms]

Repair costs depend on your business plan. Talk with contractors. 

Closing costs vary by lender and title company. Your lender could (and likely will) have an application fee, origination fee, and legal fees. These can be negotiated. Then there's third party reports like environmental, survey and inspection. That's just in fees. Then you'll likely need to have up to two months of debt service, up to a year of property tax and insurance. A few extra months of debt service or interest reserve. 

The big title companies have calculators on their website to estimate their costs. 

You'll likely need an attorney to review the PSA, review the loan documents, and draft an opinion letter. 

Outside of closing costs, you'll have deposits/bonds for the utility companies. You'll need working capital to run the property, which you'll deposit with your property manager (at least one month of operating expenses, but that's bare minimum. We go with two months.). You'll also want some reserves yourself, I'd say 6 months of operating expenses, or 6 months of debt service.