What else needs to be said?
Yes, you want to build a pro forma of any investment property you are looking at, but you should never rely on a seller-provided pro forma. They're all fake. Indeed, since everyone knows they're fake, even an honest seller/agent has to provide a fake pro forma because if they don't, buyers will just assume the realistic prediction is fake as well. So, never trust a pro forma. Instead, we'll tell you what to look for from a seller and how to build your own. Joe Fairless' book: https://www.amazon.com/Best-Ever-Apar... Basic Components of Pro Forma: Gross Income - Vacancy - Economic Vacancy (delinquency) + Other Income (i.e. laundry, app fees, etc.) Fixed Expenses - Property Taxes - Property Insurance - Utilities Variable Expenses - Property Management Fee - Maintenance - Contract Services - General Administration - Marketing - Payroll (for onsite management) - Recurring CAPEX Click here to see the whole video! For more, please subscribe to our YouTube channel. Check out our other videos: How to Positively Resolve Tenant Disputes (Property Management) Why and How to Screen Prospective Tenants How to Manage Collections and Delinquency (Property Management) A Guide to Due Diligence for Buying Houses How to Find a Bank to Refinance Your Investment Property Is the Economy on the Edge of a Cliff??? How Should Real Estate Investors Respond? Buying Portfolios of Houses The Case for Buy and Hold Real Estate Investment
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