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??
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!