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Updated about 10 years ago,
What is Pro Forma on a flyer/pamphlet telling me
I am looking at some commercial apartment complexes in my area. I am still in exploratory stages but wanted to understand if asking prices on a couple of deals in my area were worth exploring.
On the pamphlet/flyer for the property it gives me a 2014 Pro forma of $32,280. Is the $32,280 stating the proposed 2014 NOI or something else.
In the book, Rich Dad Advisors: ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss by Ken McElroy, he says to evaluate a commercial/multi-unit property and asking price by taking your NOI/cap rate and that should be your offer price.
I understand that you would have to get real NOI calculated by actual data to do a real life offer but wanted to do some analysis first before getting actual data to see if any were in the ballpark. So what is the 2014 Pro forma telling me in this example?