Things to keep in mind when taking over a property

[Donna Stern]

I am a CPA and was just working with a client who sold her mobile home park. Come to find out her security deposit listing was wrong.

Tip: Very important when purchasing a property with more than 1 unit to verify the security deposits transferred to you by reviewing every lease and making a worksheet listing all the details to make sure escrow credits you the correct amount of those funds which you will later need to pay out to the tenant when they leave. Then if you are using a rent software the information is then tranferred properly.

I am happy to answer any questions about on boarding a new property

Donna L Stern CPA

[Nathan Gesner]

Welcome to the BiggerPockets forums!

I recommend the Buyer ask for an estoppel on each rental. The estoppel is a form filled out by the tenant, then confirmed by the Seller, then accepted by the Buyer. It's supposed to ensure there are no surprises after closing. For example, I often see Buyers purchase property thinking there is a $1,000 deposit but then the tenant claims it was actually $2,000 because they paid the last month's rent. How will you know? An estoppel certificate fixes this problem.

Some things it may include:
1. Tenant name, contact information, and address
2. Occupancy date
3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate
4. Are there any modifications to the written lease?
5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?
6. Current lease term (expiration date, month-to-month)
7. Current rent rate
8. Rent due date
9. Security deposit amount
You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

Here is an example and explanation: Sample Estoppel

Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.