Joe DownsCEO & Co-Founder, Belrose Storage Group. Founder, Storage Moguls.

Demand the T12 or Walk Away

28 Jan 2026 · 1 min

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In this concise instructional segment, the speaker outlines a rigorous due‑diligence framework for evaluating real‑estate investments. He stresses that a property's historical performance must be backed by auditable paper trails. The three primary sources of verification are: (1) the trailing twelve‑month (T12) profit‑and‑loss statement, which shows the property’s earnings and expenses over the past year; (2) the owner’s IRS Schedule E tax return, considered highly reliable because owners rarely misreport to the IRS; and (3) the property’s bank statements, which confirm actual cash deposits and withdrawals. The speaker asserts that any financial figure not corroborated by at least one of these three sources should be treated as unreliable, effectively making the “demand the T12 or walk away” mantra a non‑negotiable rule for investors.

Chapters

Real numbers are historical performance backed by paper trails you can audit. Trust but verify. We look at the trailing 12 months or T12, which is the profit loss statement for their past year. This tells you exactly what the property has earned and spent. We also demand the tax returns, specifically Schedule E, which the owner filed with the IRS. And usually people don't lie to the IRS, so those numbers are usually the most accurate. And finally, we verify everything against the bank statements showing actual deposit— deposits and withdrawals. And if a number isn't verified by one of those 3 sources, it's not likely real.