How to Lower Your Closing Costs As an Investor

by | Jan 4, 2021 | Blog

Being a real estate investor, you are consistently looking out and seeking to invest in multiple potentially lucrative properties to enhance your portfolio and make more money. But the profit margins may get thinned due to huge closing costs. 

Closing costs usually are 2% to 5% of the loan amount. When we consider the numerous real estate’s deals you are doing, this could add up to a big amount, causing a significant dent in your budget for investing and reducing your profits.

You must make every possible effort to save on these closing costs and it is entirely possible if you act in a smart and informed manner.

First you must try to negotiate with many sources for your loans like banks and moneylenders. Try to get competitive quotes from as many lenders as possible.  Remember you are a potential customer to them and they are service providers. By adopting such a smart approach, will motivate them to lure you with the best quote possible and you will get a quote that would match closely with your expectations and business goals.

While doing so, do not ignore your regular bank because many banks reward their customers for their loyalty with the lucrative discounts. Moreover, there must be a good reason that you have been  giving your business to your regular bank for such a long time.

Discount points are other potentially attractive features offered by the banks to lure the customers but avail of them only if you are going to hold the property for a long period of time. But if you plan to just upgrade and sell the house quickly then this is of no use to you.

Time also plays an especially important role in helping you reduce the closing costs. If you purchase a property at the beginning of a month then you might have to pay for the interest, property taxes, mortgage insurance, and homeowners’ insurance for every day of the month. You can save a lot on that by opting for a closing date towards the end of the month.

If the home seller or a realtor are highly motivated to sell the property, you can ask them if they can contribute towards the closing costs. There is a strong chance that they might agree and this could save you a lot of money.

Many times investors are simply not buying a property right calculating all their costs in and so working with an experienced team like American Made Home Solutions and buying a property from their wholesale deals which calculates in all those costs for the average investor and still leaves room for a profit helps to insure you will be more profitable.  Sign up for our buyers list at today!


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