OfflineMostly, this has to do with lowering your out of pocket costs by minimizing the amount of "prepaid interest" you pay on your mortgage at closing.
Interest on your mortgage begins running from the date your transaction closes, but most loans are due on the first day of the month. So when you close, you "pre-pay" the interest between the closing date and the end of the month.
For example, if you close on the 29th of October, you prepay one day of interest to cover the rest of October's interest. Your first payment will be due December 1st, when you will actually be paying November's interest.
As a different example, if you close on the 6th of November, you prepay 24 days of interest. This means you have to bring in more cash to close your real estate purchase than would have been required by closing just eight days earlier.
However, the benefits of a late-in-the-month closing are only short-term.
With the October 29 closing, your first payment due-date will be December 1. With the November 6 closing, your first payment is not due until January 1.
It just takes less cash "out of pocket" to close near the end of the month. That is the major benefit.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
on RENTAL units will provide you with pro rated rents and transfered deposits and fatten your pockets at closing since rents are paid in advance and taxes are paid in arrears which you offset any pre paid interest(which is tax deductable).
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
I've always closed between the 13th & 17th on my rentals so that I get a 'free' month; I close on february 14th, no mortgage payment in march, first payment due April 1.
It works perfect for when you have rentals; a free month of rent in your pocket.