Financing
Closing Costs
Lender fees, title, escrow, insurance prepay, etc. Typically 2-4% of purchase price for investment properties.
Example
On a $400,000 purchase, expect $8,000-$16,000 in closing costs. Larger of: origination fee + title insurance + recording + property tax escrow + insurance prepay.
Why Closing Costs matters
Closing costs eat into your cash-on-cash return immediately. They're often forgotten in the initial back-of-napkin underwrite. Always include them in your total cash invested when calculating CoC.