Purchase Information

Add purchase information to link start dates and calculate the IRR

The property purchase information is made of the date, amounts and closing costs used to acquire the property. It is necessary to calculate important financial indicators such as the Net Present Value (NPV) and the Internal Rate of Return (IRR).

Often you may be creating a model for a potential purchase where the exact purchase amount and date are unknown. For potential purchases, estimates can be used. You can update the exact purchase price and date at a later time once the sale is complete.

If you are modeling a property you have owned for a long time, input the original purchase information, even if it falls outside the analysis period.

Adding the purchase information

Purchase date

The date the title of the property was or will be transferred. This must be specified as a date and may be referenced elsewhere in the model. References to this date will be linked to the analysis start date when this is not present.

Purchase price

The amount paid before closing costs. This is the price the buyer and seller have agreed upon. Must be entered in the currency the property is modeled.

Purchase description

Optional, additional details or reference sources that would be helpful to model viewers.

Adding closing costs

Closing cost name

The unique name of the closing cost, often describing the nature of the cost.

Examples include 'Appraisal Fee,' 'Legal Fees,' 'Recording Fees,' 'Escrow Fees,' 'Title Insurance' and 'Transfer Taxes.'

Closing cost vendor

The optional name of the closing cost supplier.

This is used by reports to display additional information to the viewer and group sources of costs and revenues.

Closing cost description

Optional additional details or reference sources that would be helpful model viewers.

Closing cost type

Determines how costs will be input.

Type options:

Amount at Closing

A fixed amount paid on the closing day independent of the purchase price.

Percentage on Closing

A percentage of the purchase price due on the closing day.