When underwriting a potential investment, do you utilize the T12 and based off of it you create the Pro Forma?

or maybe my partner, myself, and my partner's parents could form a legal entity so we can all own the titles?

Ask for actual tax records on rents collected...dont accept "pro forma" operating statements, those are wishful thinking. 

Michelle I think the idea to form a team is ideally the way to go. 

Analyze properties, ask for rent rolls, P&L, trailing 12, figure out DCR, current cap rates, pro forma. 

If yourself and husband form a partnership vs.

I would tell him he must form a partnership between him and the other cash investors he has, and that new partnership becomes the partner in the next deal(s).Don't add on any partners with split roles.  

There are banks that lend based on the pro forma of the asset itself and while you still need to qualify, they look at the asset more than they look at you.

In short, pro formas showing $300 or $400 per month in free cash can easily be swallowed up by the cost of a new furnace or roof or in some cases by a difficult tenant who knows the rules of the game.   

I would also recommend getting a few years' copy of their schedule E and compare actual expenses to whatever pro forma they gave you.