All Forum Posts by: Matthew Holtry

@Patrick Liska - It's a great name! :o) 

Thanks for checking on everything here. We are going with the national lender so the first set of fees ends up right around $1,700. Property + Pest Inspections are going to run $400. Transfer taxes will be $600. So those alone put me at $2,700. 

I am going to work with my Realtor and title company to see where we end up on the title-related expenses. Unfortunately, I think I am going to end up close to $3,700 to close on this property. I will keep trying to do what I can do to get the costs lower, but this might end up being a little bit of money paid for the learning experience.

@Chris K. I called the lender who gave me that quote, and she said she is 100% sure it is $50 so that is good to know.

Based on all the input from everyone here and following up with these lenders (as well as a few others), my key takeaways are:

• Title-related closing costs will probably be in the $900-$1,300 range (since these were provided by individuals in the "local" market who know the area a bit better). The national lender also said he had to shoot high so he didn't have to come asking for money later.
• I am hoping (but not planning) for the Realtor estimate to be the most accurate since he is a very experience agent in the area and has also helped us find a title company.

@Patrick Liska - Does the 4.5% estimate include a lender's origination fee? If not, adding another $900 on top of your estimate fills in the remaining gap to explain the difference. 

I am currently under contract to purchase a tenant-occupied rental property. The current tenant has been in the property for more than 10 years, has never had a single late payment, and keeps the property in exceptional condition. 

He is currently paying $700/month for rent and rental comps in the area indicate rent should easily be $850/month. 

This gentleman is also a disabled veteran who relies on VA benefits and is very concerned about future rent increases due to his fixed monthly income. While I fully recognize this is a business, given way he treats the property and always pays on time, I will not consider evicting the tenant, but I do want to take steps to normalizing the rent. (He has not had an increase in more than 5 years.)

Another BP enthusiast said it may be possible for the VA benefits to increase proportionate to future rent increases. For example, if I increased the rent $50/month, he could ask the VA to increase benefits by $50/month to offset the costs. Is anyone familiar with details about these programs and what options might be available to explore?

Thank you all for your help!

Wow! You all are awesome! I appreciate these insights. It certainly sounds like my next step is to reach out to the title company direction (and do some shopping a @Kevin Felmlee suggested). 

I did reach out to the national lender and their response was basically "Always use the title company's numbers. We have to estimate high so we don't come back to you asking for money later."

In general, does the lender have any control or influence over any of the fees with "title" in the name? For example, as @Percy N. pointed out, I understand the Title Lenders Coverage is to cover the lender but if I pick the title company, how can the lender be sure to get the right amount of coverage (and how does that impact fees)? I think there is some kind of connection there that I do not yet fully understand.

Also, @Chris K., I think you are on to something with the Title Owners Coverage Premium typo. Just a short diversion here... We are actually purchasing a duplex, but it is deeded as 2 separate properties (so I only included costs for 1 of them above). When we first asked for financing, the local lender gave us a quote on a $130k purchase price and the Title Owners Coverage Premium was $1,150. Then, when we had to divide this into a $60k purchase and $70k purchase, the Premium dropped to $50 on each property. So, for this line item, do you typically see ~$50? Or do you see $800 - $1,100?

After 2 years of "getting ready", my wife and I have finally made an offer on our first deal! 

I recently attended a BP Meetup Group where a group of ~20 great people analyzed the deal, and many of the seasoned pros felt the closing costs were way too high. However, since these investors were not active in Pennsylvania (where this investment is located), they suggested reaching out to the forums for help.

I am purchasing the property for $60k in Carlisle, PA, with conventional 20% down, 30-year financing with 0 points. 

The 3 closing cost estimates we received are:

• Realtor: $3,874
• Local Community Bank: $3,839
• National Lender: $5,090

For investors active in the Carlisle/Harrisburg area, is this what you are used to seeing? Why do the title-related fees vary so greatly? If these fees are high, any advice for getting a better deal?

Thank you all for your help!