It is an agreement between you and the tenant(s) stipulating how much rent is to be paid, when it is to be paid and where.  

From a practical standpoint, the posts above are correct.However, a purchase contract is just that and can have a multitude of "odd" terms if the parties agree.Not necessarily a direct comparison but I purchased a farm that was under cash rent.We were closing in June and I stipulated in the contract that I receive the entire annual (paid in one annual payment) payment that would be due in October. 

Stipulations were the resident must sign a 12-15 month lease, lease within 24 hours of tour, and move-in before 4/30.Here's where it gets hairy.

However, the seller stipulates that i am paying all the transfer taxes and I buy the house AS IS and I am responsible for U&O.

The 6% on the agreement really bothers me as it is stipulated that for each transaction he needs to get his full 6% meaning if only 3% is paid by the seller, I would have to pay the remaining 3%.

With some stipulations which you wil want to talk to your custodian about.

Hi Justin,I'm not an accountant but I believe the commission and any improvements can reduce the gain but not sure if you can get around the 2 year stipulation.

For some reason I was under the stipulation that I couldn't post unless I bought a membership.

There are still programs that afford homeowners 100% financing without the declining market adjustment, but there the majority of banks are applying the 5% stipulation.

Let's stipulate that you have a 20 unit building and they're all the same unit as you used in your example, and it takes 8k per unit to get the additional $150 in income at market rents.If your additional NOI is $75 ($150 - 50% expenses) per month then you have an addition $900 per year in income.