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Purchase Price

Purchase Price refers to the amount of money paid by an investor or buyer to acquire a piece of real estate. This amount does not typically include additional expenses related to the transaction, such as closing costs, brokerage commissions, and loan fees. The purchase price represents the principal sum agreed upon between the buyer and the seller for the transfer of the property.

For real estate investors, understanding the purchase price is crucial because it is the starting point for determining potential profitability, calculating return on investment (ROI), and assessing the value of the property in comparison to its market value or the potential rental income it might generate.