Confused by rent roll/ pnl

[Jessica Costa]

I was given the below rent roll / pnl spreadsheet from a broker who has an investor who is looking to sell two multifamily properties. 

I am a little confused by the proposed financing section - are they proposing seller financing? It lists the line of credit, are they referring to a heloc on the property? And if so, how does that work in this situation? 

Any insight would be great, thank you! 

[Oren K.]

Jessica,

As it does NOT explicitly say seller financing I would not presume that it is (but you can always ask). Rather they are showing a 'proposed financing'.

They are NOT guaranteeing that you will find this (LTV, Rate, Term) or any other aspect of a loan (fees, commissions, etc).

Leaving the loan aside, I can't help but make a couple of comments regarding the numbers;

- Vacancy of just 5% means that if you have 1 move out in a year and it takes you more then 1 month to turn the unit and re-lease it, you have exceeded your vacancy budget. It is not clear how stable the tenants are but this is something I would question.

- I love that they are including CAPEX above the line to NOI. Not only is this not correct but I certainly also don't believe that $1200 per year is sufficient.

- With ~18K for expenses and ~63K of income, that works out to ~29%; extremely unlikely (to the point that I would buy a lottery ticket first - at least I would know what I am going to loose ;). Specifically I note that there is no allocation to management, landscaping, snow removal, unit turns, etc.

As always, verify everything!

Oren