Closing on multi-family. How do I get the pro-rated rent?

5 Replies

Hi all,

This is my 1st deal and my agent is telling me all the pro-rated rent should be taken care of by title company. I have the final closing disclosure from seller and it does not have any pro-rated rent or deposits from renters. 

What should I do?

Push back ... send back the disclosure indicating that it is missing the rent adjustments (provide your own numbers) and security deposits.

Either you, or your agent, should also be collecting estoppels directly from the tenants themselves to verify the information provided by the vendor (rent amount, deposit amount, any side deals, etc).

@Roy N. All the information about rent and deposit should show in final closing disclosure correct?

Originally posted by @Thawda Aung :

@Roy N. All the information about rent and deposit should show in final closing disclosure correct?

Absolutely, but you also need the estoppels to ensure the owner and the tenants have the same understanding of rent and deposit amounts ... and any other off-lease deals.

@Roy N. To include all those changes, should I talk to lender or title company?

@Thawda Aung I think @Roy N. is putting you on the right track. I’ve had it come up (more than once) where pro-rated rents, property taxes, etc. are calculated wrong. And calculated wrong more than once. You also need to review the leases for even things like pet deposits. Ask the owners (or their agents) if anyone had prepaid their rent for __ months. If it’s a large enough complex (i.e. a lot of tenants) expect to hear stories of promised “13 month free” or other impossible to verify scenarios. What really matters is what’s in the leases as you’ll be bound by them.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here