Updated over 11 years ago on . Most recent reply
Bad Accounting
I found a stash of duplexes that I have become interested in potentially purchasing. The numbers look solid at 13% Cap Rate. The 2% rule is at 1.5 and COC return is close to 30% (20% down). After feeling good about that, I request financials from one of the duplexes. The accounting work is crazy, for example, the units rents for $765 however the year to month end is $9900. I have a statement for each side. the other side shows year to month end at 6000. One would think that if you are really interested in selling your rental property, at least make sure the accounting adds up. Have any of you all experienced bad accounting when investigating rental property purchase? What did you do if you did experience accounting numbers that mathematically did not make sense? Is this a sign?