BRRRR Closing Costs: You Pay Twice

Most BRRRR guides make the refinance sound like free money. It isn't. You close twice. First on the short-term purchase-and-rehab loan, then again on the DSCR loan that pays it off.

Each closing comes with its own title work, appraisal, insurance, lender fees and recording. On top of that, you pay carry while you wait for the refinance lender's seasoning clock to run.

This post covers all of it. You'll see every cost at each closing, which ones repeat, which ones you can sometimes shrink, and a cash plan to build before you write the offer. For the line-by-line on the purchase side, keep our hard money closing costs breakdown open in another tab.

What the public benchmarks say

Start with the published numbers. They track consumer mortgages, not investor loans. Use them as a reference point, not a quote.

According to LodeStar's 2025 Purchase Mortgage Closing Cost Data Report, published April 27, 2026, the national average total closing cost on a purchase was $4,528, about 1.04% of the sales price. That number leaves a lot out. RealCostIQ, in an analysis published July 30, 2026, notes that LodeStar's figure counts settlement fees, title policies, recording and transfer taxes, with no origination fees and no prepaids.

The refinance side runs lower. AmeriSave, citing LodeStar's refinance report released May 11, 2026, puts the national average refinance closing cost at $2,207, about 0.67% of the loan amount. Location still matters. MBA Newslink reported on July 6, 2026 that LodeStar found higher-than-average refinance costs in New York and Florida, because certain taxes there are charged on the loan or note amount and apply to purchases and refinances alike.

Here's the takeaway. Your rehab-loan points and your DSCR origination fee sit on top of those averages. So does the escrow you fund at the refinance.

Closing one: the purchase-and-rehab loan

This is the bigger check. You're buying the property and opening the loan in a single closing. Expect these lines:

• Lender origination and points. Your term sheet spells them out.
• Underwriting or processing fees, if your lender charges them.
• Appraisal. It usually covers as-is value and after-repair value (ARV).
• Title search, lender's title policy and, often, an owner's policy.
• Settlement or escrow fee, plus attorney fees in states that use closing attorneys.
• Recording of the deed and the mortgage.
• Transfer taxes, where the buyer pays them.
• Builder's risk or vacant-property insurance.
• Draw or inspection fees, if the term sheet lists them.

Get the insurance right. Vantage Point Risk's BRRRR insurance guide, published in 2026, warns that many landlord policies exclude or sharply limit coverage on a vacant property under construction, so the rehab phase generally needs builder's risk or a vacant-property policy. Our builder's risk vs. vacant dwelling guide explains which one fits your scope. For the full purchase-side fee list, see the hard money closing costs guide.

Closing two: the DSCR refinance

Now the property is rehabbed and rented. A new lender, or a new loan with the same lender, pays off the short-term debt. Expect:

• Origination and underwriting fees on the DSCR loan.
• A new appraisal. Lendmire, in an October 2026 guide to DSCR refinancing, notes that the appraisal is still required and drives both the value and the new rent figure.
• A new lender's title policy and title search.
• Settlement fee.
• Recording of the new mortgage and the release of the old one.
• Payoff of the short-term loan, including interest accrued through the payoff date.
• Initial escrow for taxes and insurance, where the lender requires it.
• A landlord policy to replace the rehab-phase coverage.
• Any exit fee or minimum-interest clause on the first loan. Read your term sheet for these before you sign it.

Side by side: what repeats

Five lines show up both times: title, appraisal, insurance, lender fees and recording. Budget them twice.

Which costs you can sometimes avoid

Title: ask for the reissue rate. It's the cleanest saving in a BRRRR. First Integrity Title says its reissue discount runs between 10% and 50% off the basic rate schedule, depending on how many years have passed since the prior policy was issued. State rules change the math. Atlantic Title's 2026 Florida reissue calculator explains that Florida title premiums are promulgated rates set by the Florida Office of Insurance Regulation. Keep your policy from closing one and hand it to the refinance title company. Title problems cost time as well as money, so learn to read commitment exceptions before closing two.

Skip the third closing. Some investors refinance payoff-only first and pull cash later. Lendmire, in an October 2026 piece on DSCR seasoning, says the two-step route protects you from a bridge default but means paying closing costs twice, which only pays when the bridge carry exceeds the cost of a second closing. In a BRRRR, that second step is a third closing.

Rate-and-term may move sooner. Mo the Broker, in a 2026 guide to DSCR seasoning, says a rate-and-term refinance from a hard money loan into a 30-year DSCR loan needs 0 to 3 months of seasoning at most DSCR lenders. Guidelines vary by lender, so confirm them in writing.

Insurance: plan the handoff. Vantage Point Risk points out that a standard landlord policy usually won't cover active renovation, and a builder's risk policy won't cover the property once it's rented. Line up the landlord policy before the tenant moves in so there's no gap and no rushed premium. Our investment property insurance guide covers what lenders require.

Seasoning: the cost that never shows up on a settlement statement

You won't find the wait on any settlement statement. It still costs you.

Lendmire's October 2026 guide on refinancing from hard money to DSCR says seasoning on a DSCR cash-out typically runs about 6 months from title recording, subject to lender guidelines. Timing also changes the size of the loan. Lendmire's October 2026 seasoning guide explains that inside the window, leverage applies to cost basis, meaning purchase price plus documented rehab, and after the window it applies to appraised value. The conventional route is slower. Lendmire's guide to investment property seasoning notes that Fannie Mae now requires 12 months on the existing mortgage being paid off.

So run this math before you offer:

Seasoning carry = months from rehab completion to the seasoning date × (short-term loan interest + taxes + insurance + utilities − rent collected)

Rent helps once a tenant is in. Until then, you carry the property alone. Make sure the short-term loan's term outlasts the seasoning date, too. Our guides to holding costs and extensions and maturity show how fast that carry adds up.

Plan cash for both closings before you make an offer

1. Price closing one. Use the lender's term sheet and a title quote. The hard money closing costs guide lists every line.
2. Price closing two now, not later. Ask the DSCR lender for its fee sheet. Ask the title company for its refinance or reissue rate.
3. Date the seasoning clock. Count from the expected recording date, not from rehab completion.
4. Size the refinance conservatively. Appraisals can come in short of your ARV. Rent also has to cover the new payment, so run the DSCR on market rent.
5. Hold the cash. Keep both closings and the seasoning carry out of your rehab budget and your contingency.

Then work backward. Your offer has to leave room for the payoff, both sets of closing costs, the carry and your rehab cash, all inside the refinance proceeds you can realistically expect. The BRRRR strategy guide walks through the full deal math.

How a Funded Capital BRRRR moves from term sheet to refinance

Here's how the path looks with us.

1. Apply. Send the purchase price, rehab budget, ARV and your exit plan through /apply.
2. Term sheet. Read every line. Ask about refinance costs at the same time, so closing two is priced on day one.
3. Third parties and close. The appraisal, title and insurance get ordered. We close in 5-10 business days, depending on the deal.
4. Rehab. Funds release against your draw schedule. Finish the work, then lease the property up.
5. Switch coverage. Move from rehab-phase insurance to a landlord policy.
6. Refinance. Move into our DSCR loan program. New appraisal, new title policy, new recording. The hard money to DSCR refinance guide covers the file.

The purchase leg runs on our fix and flip loans. On credit, most programs start at 660+, the best tiers need 680+, and 640-659 is reviewed case by case. We lend in 45 states. The excluded states are VT, UT, OR, SD and ND. Terms are subject to underwriting, appraisal, title, and insurance.

Apply Now

Price both closings before you write the offer. Apply now or call (305) 857-5620 to walk through your BRRRR from the first closing to the refinance.