What happens to deposits when I buy a property with tenants in it

[Jeff Lappe]

I am a new pro on BP and new to REI. I am looking at my first deal on a multi-family that has existing tenants. What is done with the deposits that the current owner has collected, so that if I buy the deposit refunds aren't coming out of my pocket if a tenant moves out? Thanks for any insight!

[Colleen F.]

All deposits should be credited on the HUD statement at closing. Get Estopels signed by the tenants stating what the basic terms of the lease are and what deposits they have made. This is where you can capture what should be credited or transferred to you at closing.