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TOPIC: no financial statements
#7472
sbaco (User)
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no financial statements 7 Years, 2 Months ago Karma: 0  
There is an apartment building that is for sale and i am interested in purchasing it. I've requested that the owner send me financial statements so that i can review the profitability of the apartment building. The seller is not willing to give me financial statements as he says that the information is private and he is not willing to share. I have offered to sign a non-disclosure agreement, but the seller still will not provide the financial statements. The Seller provided me with information about the rents but said that i didnt need to see the financials.

Is there a way that i can prove the income and expenses of the apartment building without looking at the financial statements?
 
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#7519
tbm1231 (User)
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Re:no financial statements 7 Years, 2 Months ago Karma: 0  
If a seller wont share the financial statements, then walk away from the deal. That is a terrible sign. Its a rental building, not a patent with intellectual property. Not sure what he is trying to hide, but the reasion he isnt sharing is that if you were to see the financials then you would know that the property has problems and likely is not worth the asking price.

If you want to waste your time, you could always review the leases and calculate anticipated rents (assuming all tenants pay on time. But, how would you estimate the overhead and expenses? Tax info is easy to get, but how would you estimate the utility costs? What about repairs. What if he has been patching the roof every year and doesnt want you to know.

Like i said at the beginning.....walk away and dont look back!
 
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#7523
Brian (User)
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Re:no financial statements 7 Years, 2 Months ago Karma: 1  
i agree.

BTW, how can you based the profitability of of any company if you dont have the financial statements? Usually sellers require that you sign an nondisclosure agreement to protect against unauthorized disclosures and to protect seller private info.

If a seller wont give financials, then walk! Seriously!
 
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#7581
sbaco (User)
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Re:no financial statements 7 Years, 1 Month ago Karma: 0  
I agree with all your statements. The seller is an asshole. He wont divulge any "private" information as he says that you can derive income from the leases and the real estate taxes. I want to find out more about the other misc expenses, lawsuits, attorney fees, etc. I really like the apartment building and think i can turn it around. I think the price that he is asking is fair. So, i am tolerating the seller's bullshit in the hope that i can get the property and turn it around in the short term. If i can get it to 100% occupancy then i can increase the cash flow by 14%. Thats why im putting up with the seller's bullshit.
 
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