In commercial multifamily real estate, there’s a language that is spoken when you are connecting with brokers, property managers and other investors in the profession. To avoid sounding like a novice, an investor must be fluent with the real estate terminology to be taken seriously. Let’s take a minute to breakdown one of those terms.
Financing fees are one-time fees charged by the lender for offering the debt service. It is also referred to as a finance charge. Usually, the financing fees are charged around 1.75% of the purchase price.
- For example, a 200-unit apartment community purchased for $10,000,000 will have around $175,000 in financing fees.
By learning these concepts and terms, you’re separating yourself from the novice investor looking to be more active than passive. Here’s where you can learn more multifamily investing terms.