The prepaids are another $3k and about $2k of that is for taxes and insurance - same story with these - you would have to pay taxes and insurance even without a loan.

In regards to the two items you noted:1) The unilateral decisions referenced was an open question for a member of the community hopefully with a legal background to opine because I said I did not have one. 2) The comment regarding "closer to a ponzi scheme" is in reference to the practice of claiming positive financial leverage on loans that have an interest rate falsely giving the illusion of positive leverage because interest has been prepaid either through a buydown or a lower than market interest rate cap.

Security deposits and prepaid rentsThese do transfer because you inherit the obligation to refund them in the future.You should receive a buyer credit at closing for the full amount of: security deposits, last-month’s rent (if collected), any other tenant-held balancesExample:If the seller is holding $10,000 in deposits, you should receive a $10,000 credit so you’re made whole when tenants eventually move out.2.

Therefore, even if allowed in your state, update your lease to specify that this payment is considered "pre-paid rent," not a security deposit (which has cap/restrictive laws separate from those mentioned).

What I think I understand now is that, for instance,, if the taxes due for the bid year are $500 and you win at $5000,  the extra $4500 is essentially pre-paid 2009-2013 taxes for when you get the deed. 

If you accept debit card payments then your tenant could buy a re-loadable prepaid debit card at a major retailer like Walmart.

Also consider a portion of your funds for a prepaid college plan if available as you might be able to beat inflation.

It could be a pre-paid credit card. 

One year and lot take downs start mid Nov. so we will start getting paid down then.. 120 days of pre paid interest. then he can payoff at anytime..

So when I say "pre-pay" that means Jan1st, there paying rent for Feb, because Jan is "pre-paid".