#195: Don't Underestimate The Impact That Transactional Costs Have on Your EQUITY When Buying and Selling Assets
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In this episode of the Multifamily Wealth Podcast, I dive into a topic that is often overlooked when it comes to real estate investing - transactional costs. You see, when buying and selling properties, there are a lot of hidden costs involved that can significantly impact your returns.
Whether you're an investor or a homeowner, understanding these costs is crucial. I break down the math and explain why it's essential to consider the impact of buying and selling on your equity beyond just the percentage of a property's purchase price. I know this topic may not be commonly discussed on other platforms, but I believe it's vital for anyone considering buying or selling a property. The episode is packed with valuable insights and practical advice that you won't want to miss.
In this episode, we discuss:
- How can transactional costs impact an investor's or homeowner's returns when buying and selling a property?
- What percentage of a property's purchase price do closing costs typically represent?
- How do closing costs affect the equity invested in a property, especially when using debt?
- How does leverage magnify the impact of transactional costs on equity?
- Why is it important to accurately underwrite transactional costs before buying a property?
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244 episodes