Calculating your initial investment
Hi all!
I'm hoping you can help me understand how you look at your initial investment amount.
I purchased my first multifamily last year (and am now looking for a second). Previously, I added together the the percentage downpayment, my total closing costs, and any renovations made to calculate my initial investment. Looking back at the closing table I noticed there were a lot of other expenses paid including prepayment of insurance, initial payments into escrow, and principal reduction payments (to cover unused seller concessions). My thought is that some of these closing costs are operating in nature and should not be included when determining the initial investment. Please let me know what you think.