Good Morning BP Community!
I know, I know: It depends.
BUT, for the sake of gaining some really general knowledge: On a "standard" $500,000 deal, what would be a best guess for closing costs and/or upfront costs? (FYI: I'm in Western New York, where taxes and fees destroy everything.)
I.e. On a typical MF deal, what's a fair amount for my lawyer to charge for the closing? What should I expect him to do that doesn't get done on a residential closing?
What should I expect lender closing costs to be? Appraisal? Inspection?
I've been doing some digging/asking around, and the numbers I'm seeing seem to vary quite a bit - I'm just looking for a baseline, and I understand special circumstances make things more expensive. But if I'm going to be able to analyze these deals properly, I can't just keep using an extremely 'safe' number. (Well, I can, but it just means I might be walking away from an otherwise good deal, because I think my cash into the deal is more than it will be.)
On a 4 or 5 million dollar deal I see about 1 to 2%.
Depends on if you use a capital markets broker for a loan or not and they generally charge 1% at closing. If LTV is low enough like 65 or 70% sometimes the lender will let the mortgage broker fee of 1% be financed into the deal amortized into the loan. So for instance instead of paying a 40,000 fee it makes the loan payment rolled in a few hundred more a month etc.
On smaller deals like you are talking the total percentage of fees is much higher.
For instance if you buy for 500,000 and put 100,000 down for 400,000 loan a capital markets person isn't going to source a loan for 4,000. Some charge minimums of 10 or 15,000 etc.
Attorneys run so much per hour they charge whether a 500k deal or a 5 million deal. Time spent for an attorney depends on complexity of the deal and title issues that pop up etc. They will also generally have their junior attorney and paralegal work on other contract items at less per hour.
So on a 500,000 deal you could be looking upwards of 5% or 6% costs
Commercial Attorney: 10,000
Phase one and Property condition report: 2,000
Title Policy: 1,500
Landlord property insurance: 2,000
Capital Market Mortgage Broker: 10,000
Is the landlord property insurance an annual fee? Is that present on a NNN lease as well?
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