Lack of Trailing 12

[Andre Alonzo]

I've been talking to brokers this past month and I'm seeing that most of the properties don't have a T12 available. At most, they have a T3. Are any of you making offers without a T12? Am I asking too much to see the T12 before making offers?

[Mike Dymski]

Under the right circumstances, particularly with mom and pop operations, it can be an opportunity because the lack of data may push buyers away. Many investors recreate it anyway in their validation and underwriting process and some will reduce their offer price to mitigate risk. Surely, they can provide a rent roll and you can recreate the income (in conjunction with your market study) and determine turnover (and then validate it with a lease audit). Nicolas covered the expense above.

The sales broker (and mortgage broker, if one is involved) and you will likely have to provide (and create) some level of historic P&L for your lender.

Can request tax returns, but they can make excuses for that as well.

For larger properties with professional management, a T12 should be a given.