24 Unit under contract...cant verify income

[Ryan Oelmann]

Good evening all,

After months of searching, I found a 24 unit complex that I really liked and all the numbers worked for me. It was off market, so I've been dealing directly with the seller and worked out some creative financing to help get me in the door without 25% down. Once I received the documents from him I found a hiccup, all of his tax returns and bank statements included 4 other doors, 2 single families and 1 duplex. When I originally got the documents to begin with I did not get the pages I found this on but the yearly income made it appear as though the 24 unit has been nearly fully occupied for the last 3 years but now I find out 4 other doors were also included in those figures. Has anyone run into a situation like this? He tells me he's never broken the income/expenses per individual property which will never allow me to know the true income or vacancies from previous years. Deal breaker when no way to verify income?

Thanks everyone!

[Manik Zaman]

I wont put too much attention on tax returns. Sometimes people represent income expenses in return that arent 100% representation of the business.

I would assume you have fair knowledge of the area. With that try to judge how much rent you could get from the building minus expenses; then see if this makes business sense. 

Otherwise you can try to renegotiate the deal to make it work for you.

Its advisable always being on safe side.