Closing

Closing is the meeting or signing where a deal becomes final: loan papers get signed, money moves to everyone owed, and the deed or mortgage goes on public record. A BRRRR deal has at least two: the purchase closing at the start and the refinance closing that returns the investor's cash.

At the purchase closing on the default deal, the buyer pays about $6,000 in closing costs plus $5,400 in points on a $270,000 short-term loan. At the refinance closing, the new $375,000 loan pays off the short-term lender, covers about $11,250 in costs, and sends the remaining $93,750 to the investor.

Both closings run through a title company or attorney, depending on the state. The refinance closing also resets the clock on insurance, escrow and property tax payments, so the first months under the new loan can look different from the pro forma.

Further reading: Closing on Wikipedia.