Problems With Financials

[Nic DeAngelo]

Good news, I'm officially a broker!

That said, I've been looking nonstop for a 4-plex that meets my investment specs in Orange County. The more places I look into, the more I see agents representing properties with financials that are either grossly exaggerated, complete guesstimations, or done 100% incorrectly showing that the agent doesn't know how to compute basic financial statements. I've had to explain to two different agents the difference between Gross and Net...

Needless to say, it's been a roadblock to making deals happen because my numbers compared to theirs are apples to oranges. Has this been anyone else's experience? What methods have you used to come to an agreement when the NOI/Cap rates show that the property is worth well below their asking price?

[Adam A.]

Nic, as everyone has already stated, it is a problem. But even if it was not, you would do your due diligence nonetheless it get the accurate answers to your questions.

A 4-plex is still considered residential housing (1-4 family) and thus most of these owners are not commercial landlords. Even if the agent was good at what he/she does, most of these 2/3/4-plex owners won't know the numbers themselves.

Also, an successful commercial agents won't waste their time on those smaller deals. Too much work for little return.