Platform · Glossary
Closing costs.
The one-time fees you pay at the moment of acquisition. The in-app tooltip is precise: "Estimated acquisition costs such as lender, title, recording, and transfer fees." They typically run 2–5% of price, depending on geography, loan type, and whether you negotiate certain seller concessions.
What's included
- Title insurance — typically the largest single line, protects against title defects
- Escrow / settlement fees — paid to the closing agent
- Recording fees — paid to the county to record the deed and mortgage
- Lender fees — origination, underwriting, appraisal, credit report
- Transfer taxes — vary widely by state and county; often the largest item in high-tax jurisdictions
- Prorations — property tax, HOA dues, and utilities prorated to the closing date
- Insurance prepayment — first year of hazard insurance often paid at closing
- Tax and insurance impounds — lenders often require a few months' reserves in escrow
How 3Y rolls them into the math
In a 3Y analysis, closing costs flow into both capital (your cash outlay) and total investment (the all-in cost of the deal). They lower the operating cap rate slightly compared to the textbook version that uses just price, and they shift the cash-on-cash math more than people expect — a deal that pencils at a 7% cap rate ignoring closings drops to about 6.6% once $9,000 of closing costs hit the denominator.