I am about to pull the trigger on my first multi-family cash flowing property. The property is located in New York State and I am nervous due to the moratorium extension through May 1, 2021. The seller has verbally told me that all renters are up to date with rent. How can I get better proof then just verbal communication through the seller? If I was able to see receipts, or bank statements showing that they paid I think I would feel better. Am I reading too far into this? Thank you!
Hey Eric, so what you would want to do in this situation, assuming you're working with an agent, is to have your agent ask for a "rent roll up" from the listing agent. This will show payments, lease time frame, and rent rates for the units. If agents are not involved in the transaction, you can request it from the seller which should get formal documentation from property manager.
@Eric McCarty , congrats on your purchase and I think you're smart to want verification. I'd ask the seller for proof, I'd be fine w/ them just showing the previous months payment. If the tenants pay by check he can share a screenshot of the cancelled check. If they pay by ACH he can share a screenshot of the account. If you have the opportunity to chat w/ the tenants while doing your inspection that may unearth what you are about to inherit as well. Good Luck!
Hi Eric, In past we have our closing atty request estoppel certificate from the seller few days before the closing. This should help with any assumption about the rent collection and if the seller holds last month's/security deposit that needs to be transferred to you.
Thank you both so much for the quick responses. I greatly appreciate it! I talked with the broker and we are going to put the offer contingent upon the seller showing proof that the rent is up to date along with providing the rent rolls. I also plan to speak with each tenant during the home inspection if they are home! Have a great new years.
Hey Eric in the words of the greatest president of the 20th century Ronald Reagan "trust but verify", You can listen to verbal declarations and opinions from the owner but never use verbal information as basis for dealing. Always in writing as small as a detail might seem to you, get it in writing.
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