Seller lacks a P and L statement

[Ray Southern]

Hi all,

Not sure if this is the right forum to post.

I'm doing homework on properties, and I keep getting to the point where I ask my Agent to get me an Profit and Loss statement on the property.

9 times out of 10, I don't get one.

At what point in the process do you ask for these?

I've been told that some sellers don't have these.

Is that normal? How can they expect to sell a building without one?

If a P and L statement is such a burden, is there other information I can ask for instead?

Thanks

[Ryan Murdock]

@Ray Southern It is pretty common for a small residential seller not to have a P&L but they should at least be able to provide the Schedule E portion of their tax returns which will give you a starting point. 

If all else fails you pretty much have to go find the pieces of the puzzle yourself: track down utility consumption figures from each provider, confirm property tax amounts with the municipality, and try and estimate what you expect you'll need for R&M and CapEx - this can be tough if you don't have a lot of experience but it's still a necessary exercise even if the seller does have solid financials to share.

Low R&M on their P&L might strengthen their bottom line but could be an indication you'll have to spend even more $$ to catch up on deferred maintenance. This is especially important with rougher buildings.