Posted by ray@lcorn on August 07, 2003 at 10:05:34:
Get the actual numbers. Look at the rent roll and collection history for the last twelve months to establish the vacancy/collection rate. (There is a difference.)
Examine and verify the expenses line by line. If the seller doesn’t have detailed operating statements, get the tax return.
Percentage estimates on revenue loss from vacancy and expenses make the NOI and cap rate calculation pure speculation. Garbage in, garbage out.