Closing costs

[Unregistered]

Client bought gas station with building, land, equipments etc.

Closing statement has settlement charges.

Should I allcoate between building and land?
What about sba loan fee - amotize over loan term?

Thanks!

[Matt Sova]

Land Value

You could find another vacant parcel of land that is about the same size, with the same FMV due to location and road frontage, in the same town. Then get the assessed value on the land and compare that to the assessed value of your land with building and whatever percentage it works out to be you could apply that to your purchase.

Yeah, right. Like that's going to happen. I have almost always used a rate of 12% of the purchase price for the land. Unless the building was a complete mess. I do not have any gas station clients so I am not sure how much I would allocate to land. The buildings are generally small and not in the greatest of shape.

Matt

[Unregistered]

You could find another vacant parcel of land that is about the same size, with the same FMV due to location and road frontage, in the same town. Then get the assessed value on the land and compare that to the assessed value of your land with building and whatever percentage it works out to be you could apply that to your purchase.

Yeah, right. Like that's going to happen. I have almost always used a rate of 12% of the purchase price for the land. Unless the building was a complete mess. I do not have any gas station clients so I am not sure how much I would allocate to land. The buildings are generally small and not in the greatest of shape.

Matt

What I ment was should I allocate "closing costs" between land and building? Or add all to Building? In my original post I left the word closing cost out!

[Brian EA]

What I ment was should I allocate "closing costs" between land and building? Or add all to Building? In my original post I left the word closing cost out!

Allocate between land and building

[Bill Tubbs]

Allocations

Closing statement has settlement charges.

Should I allcoate between building and land?
What about sba loan fee - amotize over loan term?

All loan-related fees get amotized over life of loan.

The non-loan fees get added to the property's basis, which then gets allocated between land and building.

Bill