Using rent and security deposit as down payment

[Erik Orozco]

Hi, newbie investor here looking to purchase my 1st property. I'm focusing on small multi unit properties I can "house hack" to get started. My question is if I'm purchasing said property with existing tenants can I use rent and security deposits as part of my down payment at closing? If so is this simply done by negotiating with the seller and adding it to the contract?

[Thomas S.]

Defiantly not on the deposit, it does not belong to the landlord it is the tenants money and must be held in a separate bank account until they move out.

As for the rent if you give it to the seller you will have no money to pay the bills and will have to use your reserve funds. (You do have 6 months reserve funds correct)