Willingness to Share Operating Statements Prior to Contract
Looking for experiences and thoughts from multifamily owners and investors:
Because property marketing packages can often times be misleading (i.e., understated expenses and vacancy; overstated rental revenue), it seems critical in my mind to get a better sense of the financial metrics BEFORE placing a property under contract. Performing as much due diligence up front, before the official due diligence period begins, seems critical in my mind. Without some visibility into the actuals of the property, it seems like an investor must make an uncomfortable leap of faith to place the property under contract. Asking a potential buyer to place an earnest deposit at risk without providing at least some insight into actual financials seems unreasonable to me.
With this in mind, what success have you had in obtaining 1-3 years of operating statements BEFORE moving forward with placing a property under contract? Is it unusual to ask for this information prior to submitting a LOI? How have you navigated when you have been faced with a broker-produced pro-forma and nothing else?