Flip and Danny break down closing costs on an apartment deal totaling roughly $175,000. They walk through lender charges, title work, attorney fees, and vendor costs like environmental reports and surveys, plus smaller items like Ohio's $12 filing fee. Costs vary by deal size and structure.
Questions this video answers
$19,500 (a lender deposit to cover outside vendor/lender-paid items).
About $175,000 (hosts say "close to $175,000").
$12.
$50.
$35.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.
Podcast called Freedom through Passive Income.
That's right.
Yeah. I was first of all going to say I like your shirt, but you keep on making fun of the fact that because you're wearing a T shirt, the mic is so high you miked your neck.
Yeah. This episode is called. This episode is entitled what is included in closing Costs in apartment Deals. Yeah, it blew my mind on this one, too. So we sent 195 to cover things that the lender paid for.
And that's 19,000.
19,000. 19 5, whatever. 195 is $19,500. Because the lender that covered the lenders costs that they paid outside of closing, which was for like environmental studies.
And there's just different things. I thought the survey was going to be included in that, but it was on the hug, as we're going to talk about here in a second. So whenever you do a bank deposit like that, it's to pay what Flip was talking about. Then you get a refund later of whatever the lender doesn't use for those closing costs.
Yeah. And then other things that we paid outside of closing was for our sewer scope inspections, zone verification letters, just to name a few of our friendly folks. But then the rest is on the hud, which I'm going to let you.
Yeah, absolutely. Yeah. So there's a lot of costs that go into this. Our closing costs on this deal are close to $175,000. It's actually, I think, a little bit less than we anticipated after we did, you know, all of the, you know, things were like this could cost this. They could, you know, there's just a lot of costs and they're going to go into a deal. Especially the larger the deal that you have, the more expensive closing costs are going to be in due diligence type stuff. So let's see, what do we have in here? So I'm going to go straight to closing costs because we've talked a lot about some of the stuff you're going to see on a page one of a hud. We've talked about that before. Closing costs, settlement charges is the other word that you're going to. That's familiar to most people. When you're looking at a hud, it's always on page two is where you're going to see the cost to close. So we've got a few referral fees on here. Well, one is a referral fee. The person who brought Us the deal. The other one is an underwriting fee to our underwriter because he didn't partner with us on this deal. So we just paid him a fee for doing all the handling, all the underwriting and due diligence with us. And then there's bank fees, there's a loan origination fee. And I'm only going to say the ones that like they've got a lot of stuff in here but only a few have actual line items. So loan origination fee, we've got the credit report fee, we have the interest reserve, that is we have an interest only loan here. So the interest reserve is actual payments that will go towards that interest only payment. So if we have a reserve in here that's like $42,000, we technically don't have to make a payment because it's in the reserve account for those payments. But once that reserve account dwindles down, we have to start making those payments and. Or we could just make those payments and keep the reserve there where it's at, which is fine. And then we've got certificate and a broker fee there in that lender section. And then.
Is there a flippy fee?
I knew you were gonna say that. It's a flippy fee. There's no. That's not. No, there's no flippy fee.
No, I asked them to add it.
Of course you did. This is the guy that whenever the company gets like bonuses or anything, he's.
Like, hey, where's my check?
Where's my check?
How come I don't get a check? I want a check.
So some other things that got paid in advance was advance interest, advance mortgage insurance. Oh, this is our actual insurance. So we paid for, for the year of insurance ahead of time and then title charges. We've got our settlement and closing fee. Shout out to Allpoints Title. I'm just gonna say shout out to Allpoints Title. They are one of the best title companies we've ever worked with and they never change their fees. We actually think we should have been charged more. But of course our investors are going, no, don't, no, don't charge more. I agree with that too. But they do such a fantastic job. It's just if you are closing something in Ohio, talk to Allpoints Title, you're gonna be blown away. They do a lot and they do not upcharge to the investor. The title search, there's a fee on there for that. The title insurance binder, the actual title insurance endorsements. The security deposit is on this side of the hud. Where it's being taken from as a closing cost to the seller because he's having to transfer those security deposits to us. So it's not on our side, but it is. On page two are attorney fees for actually doing the actual legal paperwork for all of this. The filings to the Ohio Secretary of State, that was a whopping 12 bucks. Geez.
But they're on there.
They are filings for the Wyoming secretary of state, whopping 50 bucks more attorney fees. This particular attorney fee is the lender's attorney's fees as opposed to our attorney fees. And then some government charges like recording fees for us on our side and city, county tax stamps. And the deed is on the seller side of the hud. Page two, again, these are all closing costs. And then the very last section is again, deed preparation by the attorney for the title company, a courier processing payoff, whopping $35. And they're actually coming to our office to close. So they, again, they don't. They don't charge for the really awesome service that they provide. City of Hamilton Cleanup. That and those three things, by the way, are all on the seller side of the hud, not even on our side. So City of Hamilton Cleanup, that's on the seller side of the hud. And the survey, that's definitely on our side of the hud. And that's one of the things that I thought was going to be included in the 1955 that we gave the bank for those outside vendor fees. I thought they were going to pay it out of that. They ended up putting it on the survey. So depending on how much they did or did not use of the original deposit we gave them, we're going to get that back.
And then that's the flippy fund.
And then on the seller side of the HUD is the credit union payoff, his mortgage that's being paid off. And so all of that tallies up at the very, very bottom to tell us what we have to bring to or what our total closing costs are and what his total closing costs are. And his closing costs, of course, include the mortgage payoff, and that's what's included in closing costs. So every deal is going to be a little bit different. You might not have the underwriting fee if you did the underwriting yourself. You might not have a referral fee if you found the deal yourself. So there's stuff. And you might not have needed the attorney to create the legal documents. It depends. We always use attorneys and financial advisors for just things that are important to us to make sure that we get right. We're very much about protecting us and the investors that work with us. So it just depends on how you're doing the deal and what stage you're at in terms of how large of a deal you're doing. As to what you might see on a hud, but we thought we'd go over that with you because it's always interesting for people to see behind the scenes. This is one of the things that we don't talk about closing costs in HUDs when we're on the phone with investors who are wanting to invest with us. So perfect for a podcast episode.
And you definitely will not get a flippy fee on your HUD. Make sure you head on over to our website, freedomcapitalinvestments.com to join our investor club and to see all of the stuff that we're doing behind the scenes.
That's right.
But we're on Facebook and LinkedIn and all those other fun places. And make sure you hit the like button.
Oh, because, let me see, why would you hit the like button today? Because you like flippy fees.
Like.
Seriously, though, connect with us, you know, for sure, for that investor club, you know, you don't get to hear a lot of the things that we do get to talk about all the time because you have to connect with us first.
That's right. That's right. But we like to end all of our episodes with invest Smart, Live, Happy. Bye, everybody. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss.
