To prorate or not to prorate on a wrap loan

[Petr Anisimov]

We are buying a property from a wholesaler in Albuquerque, New Mexico and the following issue has arisen. Is it normal that rent and mortgage payment does not get prorated at closing? The wholesaler says that it would be a wash.

1. We are buying a small multi unit property - 9 units in two buildings;

2. We are assuming the mortgages from a seller via a wrap loan;

3. Rent has been collected on the property and current mortgage payment has been already made by the seller;

4. Initial closing date was 29th of September. As it was postponed, we were expecting that rents and mortgage payment would be prorated at a new closing date.

Our issue now is that: we have been just informed that "since this is an investor to investor deal and we are paying on a wrap loan" nothing is going to be prorated at closing, that it would just be a wash.

It surprised us. As a result, we are losing 30% of the rent collected which leaves us with less cash to start investing in the property and with the need to come up with additional money to make mortgage payment on the 1st of November.

@David Torres Is it a normal procedure in the case that one is not obtaining a commercial loan? Shall we push back on this and how would we go about it?

Thank you for your input.