Cash to close -how do i minimize this?

Question

I recently bought my first multi-family. I offered 7K above asking, minus closing costs. Still, I had to bring over 8k to the table for "cash to close". Is there anyway to mitigate the amount of cash you need to bring to the closing? I would like to move forward to my next deal, but I would like to hold to on to as much of my cash reserves as possible.

Thanks in advance for any replies!

Brian Sparr · Answer

Hi @Nathan Auclair -

You say you "offered 7k above asking, minus closing costs" - which, to me, implies you were receiving a seller credit for all of your closing costs.

Are you sure that the $8k was for actual closing costs?  Or, was it simply the balance of your down payment?

When you buy, your money is going towards 2 primary buckets: 1) your down payment and 2) your closing costs.  You can reduce your down payment by either negotiating a lower purchase price, by increasing the size of your loan (although this can sometimes trigger even larger closing cost requirements) or by receiving gift funds from a relative.  As for reducing your closings costs, you can negotiate a seller credit, get a lender credit or choose to forego some of the optional (although highly recommended) activities during your due diligence period (ie, inspections).

Good luck!