BRRRR - Buy, Rehab, Rent, Refinance, Repeat
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated 4 days ago, 12/20/2024
Identify All Acquisition Costs Before Buying
For cash-on-cash evaluation of rental properties, it is critical to identify ALL of your acquisition costs. Here is a checklist. You might have additional items depending on your market.
1. Cash portion of purchase price (of course!)
2. Loan-related fees and expenses
3. Buyer-paid real estate agent commission (Yes, I recommend buyers have their own buyer's agents. Well worth the money, plus you will have already factored that expense in to your cash-on-cash requirements to justify a purchase decision)
4. Closing costs, including recording fees, transfer taxes and HOA transfer fees, if any
5. Title insurance, if paid by Buyer
6. Legal fees, if any
7. Inspections--house, termite, possibly separate roof and structural
8. Property manager onboarding fee
9. Home warranty
10. Termite protection installation fee
11. Out-of-pocket capital improvements and repairs anticipated during the first year
12. Holding costs if renovation will be required (interest, builder's risk insurance, permits, porta-potties, lender draw request and/or inspection fees, etc.)