Closing Costs
Lender fees, title, escrow, insurance prepay, etc. Typically 2-4% of purchase price for investment properties.
Financing
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.
How to check Closing Costs before you rely on it
Ask the lender for a written loan estimate and the title company for a fee sheet before you rely on a percentage. Include lender fees, title and settlement charges, recording and transfer taxes, prepaid interest, the insurance premium, and the escrow deposits for taxes and insurance. Add every line to the total cash you invest before you calculate the cash-on-cash return; leaving them out flatters the return on every deal.
Related terms
- Cash-on-Cash Return
- Annual cash flow ÷ total cash invested (down payment + closing + rehab). Tells you how hard your mon…
- Down Payment %
- Share of the purchase price you pay in cash. Required investment-property down payment varies by occ…
Where Closing Costs shows up in TrueCap
Financing inputs sit in the analyzer's financing section: the rate can start from FRED's national 30-year benchmark and every term is editable. They drive the monthly payment, DSCR, and cash flow after reserves, so a change here moves the verdict and the Offer Ceiling; the results view names the financing assumptions most likely to change the decision.