How do you think about closing costs within cash flow analysis?
I’ve been looking for a turnkey rental and I may have found one!
I’m just a bit confused on how to include closing costs in the analysis.
What do you recommend? I’m estimating closing costs of $4,500 in a sellers market so there’s no way they would pick up the tab. The cash flow for the first year after expenses is around $5k. That would make the 1st year a wash which is why I’m not sure about the deal.
Should I:
A) Add $4500 to the asking price and recalculate my numbers? Example: Offer $105k + 4,500 closing so total house price = $109500?
B) Ignore it? Consider break even ok for year 1 since it’s in a location with around 8% appreciation.
C) other ideas?