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Updated over 4 years ago,
Buying multifamily property- how do you know tenants are paying?
I'm interested in buying a few multifamily properties, potentially as big as 30 units. I have looked at few different deals and every single one of them says the tenants are current and paying in full. If I were to go under contract, how would I verify this? I could look at bank statements but some tenants pay by money orders and I wouldn't be able to distinguish between an actual money order from the tenant vs one from an unscrupulous seller trying to make it look like the tenants are paying.
One a separate note, every seller and property manager I have spoken to, which is about 10, have said their tenants are paying in full. How is this possible with 15% unemployment? I understand that expanded unemployment benefits have made rent collections higher than expected but I find it hard to believe that no one I have spoken to has non-paying tenants.
Any ideas on how to verify rent collections would be appreciated!