I always tell people to look at the deal this way, the cash you have in a deal at Closing on day one is basically prepaid rent that you loaned your tenants and they are paying you back in monthly increments until you hit the break-even point of zero out of pocket dollars in the deal.

At closing, I settled up with the former owner to the end of 2018, paid for a month of his tax bill (which he had prepaid back in January 2018). 

All mortgage payments are 4 months prepaid in advance for just in case something major comes up.

This will be amortized over the loan period.Escrow (T&I) [Debit] - Any escrow deposit required by lender at closingInterest Expense [Debit] - Prepaid interest paid at closingInsurance Expense [Debit] - Prepaid insurance paid at closingProperty Tax Expense [Debit/Credit] - Any property taxes paid at closingUtilities Expense [Debit/Cred] - Any utilities paid at closingRent Income [Debit/Credit] - any rent prorationSecurity Deposit [Debit/Credit] - any tenant security depositChecking (or whatever account you use) [Debit/Credit] - cash payout or received at closingThere could be more to it but those are the items I can think of on top of my head.

If he/she had framed expectations properly going in, uncovered and disclosed the lien like they should have, and understood all the options available such as the prepaid lease buyout option for $15k (which the writer admits she would have readily agreed to), it would have been a non issue.

Are these are pre-paid interests?

I'd appreciate some thoughts, big picture to minutia, on how to wrap my head around this.2)When we closed on a HELOC, we had these "prepaids & fees":Flood CertificationTitle InsuranceRecording FeesOrigination FeeProperty Tax TrackingReal Estate Valuation (is this another way of saying appraisal?!)

On my contract I am putting that seller upon close owes buyer all deposits for units are due, all prepaid rent is due, all property not owned by tenants are transferred to buyer.

Have the tenants prepaid utilities as part of the deposit process. 

They also allow a seller’s credit or concession of up to 3% of the sales price to be used towards closing costs and prepaids.