Wayne Courreges IIIManaging Principal, CREI Partners, CREI Partners, CREI Partners, LLC · Disciplined Passive Real Estate. Transparent Leadership.

Analyzing T-12 Income Statements in Real Estate Investing

Name: Analyzing T-12 Income Statements in Real Estate Investing
Uploaded: 2023-09-02T00:01:36+00:00
Duration: 46 s
Channel: Wayne Courreges III
Description: This short transcript excerpt explains how to read a property’s trailing 12-month (T-12) income statement: list income sources (tenant rents…

2 Sept 2023 · 1 min

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This short transcript excerpt explains how to read a property’s trailing 12-month (T-12) income statement: list income sources (tenant rents, miscellaneous income, reimbursements), calculate net rent revenue, list operating expenses (utilities, taxes, insurance, repairs & maintenance, payroll), derive net operating income (NOI), and note that seller-provided debt is typically omitted because debt is below NOI. The speaker frames the statement as a business-style income statement and emphasizes reviewing the previous 12 months.

Chapters

And the way the financials would work is it would be like a business statement where you have like your income, so your tenant rents any miscellaneous, any reimbursements for utilities, etc, miscellaneous income. It would give you a net total rent revenue. And then below that line you would have your expenses, whether it's utilities, taxes, insurance, repairs and maintenance, payroll, etc. And then below that, you would have your net operating income. Typically, sellers don't give us their debt, you know, because that's below the noi. And, and so in short, what we're looking at with the income statement is seeing what their previous 12 months are, right.