A couple things.  2K is prepaid items.  

Most closing cost are charged by the lender in the form of origination fees and prepaid interest, taxes and insurance.

Account ClosedA cash-out refinance within 6 months of a purchase transaction when no financing was obtained for the purchase transaction are allowed under the following parameter;  The new loan amount is not more than the actual documented amount of the borrower’s initial investment in purchasing the property, plus the financing of closing costs, prepaid fees, and points (subject to the maximum LTV).After the 6 month mark there is no restriction to purchase price and closing costs. 

The first transfers 5% of gross rent to an account called "Maintenance - Prepaid".

In the past, I used prepaid legal in the interest of saving money and ended up paying more due to the inexperience of the lawyer.

I've seen prepaid items such as taxes and interest rolled into loan on initial good faith estimates (about 4K) for refinance.

Current Numbers:Purchased for 95k in 2005Note Balance $59,830.20Rate 5.75% 30 yr fixedMonthly Payment P/I $675.35Rent $1000.00Cash Out Refinance NumbersCash Out $13,885.73 + about $1500 from our escrow accountDebt to be paid off $60,000.00Est Prepaid Items/Reserves $2160.27Est Closing Costs $3289.00Loan $78,750 15 yr fixedRate 4.5%Monthly Payment P/I $831.09Rent $ 1000.00Rough Numbers If I SoldSell Price 110kLoan Payoff 60KCommissions/Closing costs 8kCash to buy a better deal 42KSo based on all this, what are your thoughts BP?!  

(https://www.thelpa.com/) they can give all of the forms you may need along with state specifics for a yearly membership of $99. if you wanted to go beyond that to have an attorney look over the forms too, you could always so something like prepaid legal (under $20/mo) and have them look it over to verify your not missing anything... though I've never had any issues with their lease in court.. 

If they opt for the pro-rated rent they will pay the reduced amount for month #2 since month #1 was prepaid at lease signing.

Do Not agree to pay "all closing costs" if the buyer is getting financing, there will be an argument about the 4-6% in fees, prepaids, etc. the buyer needs to pay with a financed deal.