Investment property, mortgage or investors

Investment property, mortgage or investors

Contractor · East Haddam, CT · Member since 2013 · 17 posts · 2 votes

I'm putting working on my business plan for my property management and investment company.  My question is what financial statements should I include for my current properties.  I'm going t be using this plan to seek new financing, wheat her it's conventional or through private investors.  If I include the income statement it shows the property at a loss because depreciation is factored in.  But the cash flow statement shows a strong positive cash flow.  Should I just include them both??

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  • Realtor · Carlsbad, CA · Member since 2016 · 42 posts · 12 votes
    9y

    Hi Jonathan,

    Don't be reluctant to show a negative P&L due to depreciation expense. Seasoned investors and lenders will recognize this as a tax savings and will look to your cashflows for their ROI analysis.

    Your prospectus should include a 5-10 year projection and all the investment metrics that a typical RE investor / lender is looking for (e.g. cash-on-cash, cap rate, IRR and NPV).

    Good luck securing financing and let me know if I can be of service!

    Rod

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