How to Setup Buying Costs

Learn how to calculate your Buying Costs with the Flip Analyzer tool.

Video Transcript

What are Buying Costs?

Buying Costs are costs that you incur when you purchase a property.  The bulk of your Buying Costs will be used to pay for Title Work to research the title, and attorney's fees to review the closing documents.

Otherwise, you may pay a few hundred dollars for a property inspection.  If you are receiving financing, you will have additional costs as well, which we will discuss in the Financing Cost lesson.

What Are The Typical Buying Costs & Amounts I Can Expect To Pay Flipping Houses?

Typical Buying Costs

Here's a list of typical Buying Costs and average amounts that you will likely have on your rehab projects.

Title Work ($500 to $1,500)

  1. Title Search ($500) - A title search is performed by a Title Company to research the property records to ensure there is clean title, and no claims or liens on the property.
  2. Title Insurance ($250 to $500) - Once the title company verifies clean title they will guarantee the title with title insurance which protects the buying in the event someone makes a claim on the property in the future.  Insurance can vary depending on the property value, property history & location among other factors.
  3. Closing Processing ($500) - Attorney fees pay for an attorney/title company to review the and process closing documents .

Inspection Costs ($300 to $500)

If you are just getting started, it's probably a good idea to pay for a professional inspector to perform a full property inspection to find any major issues or concerns.

Other Miscellaneous Closing Costs ($500 to $1k)

  1. Courier Fees ($50-$100) - Courier fees are fees to transport the closing documents .
  2. County recording fees ($50 - $100) - Recording fees are charged by the local county recording office to record the property documents in the public records.
  3. Miscellaneous Fees ($250 to $500) - There will also likely be miscellaneous processing fee/document preparation fees.

As a general rule of thumb, Buying Costs will be between $1 to $3k or approximately 1 to 3% of the Purchase Price.

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