What Is The Average Closing Cost For Commercial Deal ?
hello every one,
how much is the average closing costs for commercial deal ?
if the property i am purchasing is $600,000 small apartment building.
LTV 80% (20% down on my part).
thanks!!
I just bought a building in TX and it cost me about $8300 in closing costs. The purchase price was $179K and the Mortgage was for $143K. Even though it was a small deal, many of the fixed costs are the same. The appraisal was $2500 and the environmental was $850. I had to pay a $1,000 processing fee to the lender. Origination is usually 1% of Mortgage amount and brokers fee was the same. Your lender will require you to buy a lenders title policy, mine was $1225 for $143,000 policy. Most of these costs are nothing more than "junk fees", but if you want to play in the commercial sandbox, that is how it is.
Good Luck[ Edited by mgraval on Date 09/27/2007 ]
gees, $8300 closing cost for a $179,000 building ??? that is an outrageous 4.6% of the purchase price !!!
so , if i purchased a $500,000 building, then just the mortgage origination and broker fee alone is 2% = $10,000 that is really outrageous , these "broker" just search the web and make some phone calls and charge us bulls**t fees.
can i ask you what kind of property you purchased ? $179 seem cheap to me. how many units are there in the building .
thanks!!
thank you.
so i guess 4.3 % of purchase price would not be far off then. i will use it as my esitmate.
My purchase was a 4800sf Concrete Warehouse/Distribution building with National tenant with a solid absolute NNN lease. There are no landlord responsibilities whatsoever, (Sweet!!) Tenant has been there for many years and has made many costly improvements to the property, which makes me believe they are there for the long haul. Cap rate was north of 11.5%, so the $8300 in fees was not enough to sway me not to buy it. I wish I could find 10 more just like it. NNN Properties under a million with National AAA Rated tenants are extremely hard to come by.
Hammer the seller on either the cost of the property, or next time, I would make the seller pay for the environmental and appraisal up front. After all it is his building and if there is a problem, you can walk away , and all you would probably loose during the feasibility period is your origination fee.
Good Luck!!
thanks for all of your replies
Just in case, make sure that the liability of the property is isolated from the "plenty of equity in multiple single family residential properties". LLC or other veil.
I personally see section 8 as a positive.
See is there are state/local/fed grants or low cost $$$ available for the renovation.
is there some screening that can be installed to block the alcove.
does it pass the 1% test?
Why not flip it?
$260,000 for ten units - seem very very high
If you are a cash buyer look to offer 10k per unit.
I would pay at most $150k for this. $260k is too much for me to think about dealing with that mess.