“Running Numbers” for Property Analysis / Agent Expectations

[Kwanza P.]

Real talk…I’ve noticed many agents (some who’ve I’ve met here, no shade) are annoyed when I ask for numbers on a property. Numbers you’d typically find on a P&L statement (expenses and income /rents). More than one has referred to this as “running numbers” and one agent flat out said he doesn’t do this.

This is an error. “Running numbers” implies analyzing numbers. Interpreting those numbers after you, as an investor , crunch them into a calculator, for example.

What I’ve been asking agents to do is to help me “find” the numbers. I “run” (analyze) the numbers myself.

Many seem annoyed by the request for inputs. While I can understand it takes effort to pull numbers from a seller or their listing agent, I don’t understand why asking provokes indignation. Is it uncouth to ask an agent to request expense and income data from a seller ? I get that the seller or listing agent may never respond (for whatever reason), but is the ask of the buyer’s agent unreasonable ? Is everyone making investment decisions based on estimates only (data you get from comps for example)?

I also wonder why this type of data, along with discloses, wouldn't be readily available once a property goes up on the MLS. Seems it would save everyone in the ecosystem time and frustration if it were.

Appreciate your candid feedback !

Thanks,

Kwanza

[Joe Funari]

Quote from @Kwanza P.:

Quote from @Joe Funari:

@Kwanza P. To be clear P&L statements and running the numbers (or comps short) are two different items. P&L statements only accompany multifamily properties. But no SFR acquisitions will have such numbers. I can only speak for the Dallas/Ft. Worth market and my strategy helping other investors buy & sell here for +9 years. But P&L statements are typically only given upon request if at all. Furthermore, sellers disclosures aren't always available when a listing goes "Active" in MLS. But most of my clients want a termination option period in order for a licensed home inspector to go in. Thus, I take with a grain of salt what sellers state as any defects. If there are any the home inspector will definitely find them.

Now regarding comps I always run both sold and rent comps for my clients when they are interested in a property. If multifamily I make sure that I run different rent comps if any of the units are different number of bedrooms & bathrooms too. That way my clients have the accurate cash flow numbers for each unit. Running the comps is especially critical here in Texas since it is a non-disclosure state. Whereas, CA is a disclosure state. So getting accurate sold and rent data for any property is a must.

If you find an agent, especially in Texas, unwilling to do this for you then move on. But recommend you find one that is a fellow investor too. Hope this helps.

Thanks Joe. I appreciate your response. Agree that a SF may not have a P&L , but I’d assume the business would if the seller has a portfolio of homes they are managing. But what I’m really asking is very simple. How much are you paying for water, gas, sewage, landscaping, etc. Do the tenants pay? Even for a SF, I assume the landlord could still be paying for some things. Like landscaping or garbage. For me, these are simple questions that I’d hope most landlords would be willing to answer (but I respect if they don’t or won’t for whatever reason). I get it that disclosures may not be available at the time of listing. My point is that this seems very inefficient. Thanks again. 

Good questions. Again, I can only speak for the Dallas/Ft. Worth area but tenants pay their own utilities and lawn maintenance on SFR's. But with multifamily properties you need to make sure that they have separate meters for the various utilities. Case in point, I have an active quadplex listing in Ft. Worth that the electric is separately metered. But the water is not. But owner segregates the water bill equally between all four units. I have received the trailing 12 months of the total water bill as well. Thus, providing it upon request per seller's instructions.

Also, whenever I have listing for a client I insist on having them complete the sellers disclosure prior to me going active in MLS. The reason is here in Texas not providing sellers disclosure up front gives a potential buyer another means to terminate the contract if a sellers disclosure is not provided. Again, based on my many years of experience. But when representing a seller I remove as many potential what I call "out clauses" from the contract as possible. Hope this helps.