Can I ask for property expenses?

[Steve Triano]

I just entered into escrow with a 4 plex.  This is my first multi-family property.  Besides doing inspections....what else should I look at?  Can I ask for the prior years expenses or the tax returns?  I have estimated everything on my end so far & checked the tax records, etc, but I woudl definatley like to know the real values.  Any advice would be appreciated!

Steve.

[Andrew Johnson]

Steve Triano Sure, you can ask. If it’s a third party PM you’ll get a nice PDF of detailed expenses. If it’s a mom and pop you (typically) get either a Quickbooks export, an Excel sheet, or an email listing everything. So you run into data quality issues and even with “high quality data” you shouldn’t be surprised when a mom and pop owner run certain expenses through the business. One “package” of homes I’m looking at right now has $2,500 per year in phone expenses. There are no phones. Now does the owner run their cell phones through the business? Maybe, I don’t know. I just know I wouldn’t have those costs. But just asking for a tax return with might just be confusing if there isn’t a breakdown.