Broker Pro-Forma vs Income Statements

[Jeff O'Neal]

I’m currently under contract on a 16-unit apartment complex. The broker’s pro-forma showed NOI of $51K, however, when I dug into the income statements, actual NOI was only $36K. I called the broker, and she explained that she had omitted a few expenses from her pro-forma (new paint, carpet, plumbing repairs) since they were one-time, non-recurring charges. What appeared to be a deal with decent cash flow is now close to a break-even deal after considering mortgage expenses. I feel that these are very real expenses that should be taken into account when arriving at the cap rate and sale price of the property - regardless of whether or not they were one-time charges. How would you handle this situation? Renegotiate? Walk away? Accept the “non-recurring expense” rationale and move forward with the deal? Thanks in advance for the second opinions!