What Is The Best Day To Close On A Multi-Family Property?
In buying a multi-family property, I have a weird timing hack that I try to make happen for myself or my clients. When it comes to the time of month for a closing, I usually like to close between the 5th and the 10th of the month.
Why Timing Matters
First, this makes sure that the rent for that month is paid to the current owner and they are responsible for collecting the rent between the 1st and the 5th.
Second, if closing on the 5th, that means you get to keep a pretty large and prorated amount of the rent for the month without going through the hassle of collecting it.
Third, you now have a majority of the remaining month to introduce yourself to the tenants and get your method of rent collection rolled out with enough time for folks to log in, sign up, sync bank accounts etc.
Finally—I like the 5th to the 10th because it gives the existing tenants enough time to pay the current owner and hence then he can fork your share over to you. I would be very weary to have a current owner say “tenant XYZ didn’t pay me yet so it’s on you to collect the rent.” I would decline that request quick, and I bet your attorney would too!
If you want to buy a multi-family property, please do yourself a favor and buy using an agent who either:
- Owns multi-family property.
- Has helped others buy or sell multi-family properties.