Updated about 6 years ago on . Most recent reply
Closing Costs in the BRRRR Calculator
When using the BRRRR calculator, is it best practice to include prepaid homeowners insurance and prepaid property taxes paid at closing in the 'Purchase Closing Cost' section?
For example, when using conventional financing to purchase a property several costs and fees are required at closing such as origination fees, attorney fees, appraisal, inspection, recording fee, title, etc. However, there are also other payments needed upfront such as prepaid homeowners insuranceand prepaid property taxes. I was leaning towards excluding these two costs since they are already included as part of your monthly operating expenses. I also don't think they should be included in your invested capital (which would impact your returns) given they are operating expenses.
What does everyone think? Are there any other upfront payments paid at closing that you feel should not be included?