Actual vs Pro Forma Financials
Most broker Pro-forma* (and Seller declarations of income and expenses) is too ideal! It anticipates near 0% vacancy, higher than received rents, no repair costs needed, little cap-ex reserves, perfect low cost management, etc. ONLY buy based upon present numbers!!! [*Compare Pro-forma/projections and Seller's declarations of income and expenses side-by-side with the Trailing Twelve Months (T12**), current Rent Roll with all Current Leases, last two years of P & L statements, Seller's business plan for the property (optional), last two Years Tax Returns (optional), Bank statements (optional), List of repairs made in the last two years, Utility Bills, Insurance History, Service Contracts, Inspection Reports or maintenance records, roof inspection, well, sewer, building(s) and system(s), any Surveys, Environmental, and Earthquake Reports, Special Tax Assessments, Easements, Property Survey (Optional). **A T12 is a financial statement that summarizes a property's income and expenses over the previous 12 months]