Pro forma financials vs. actual rent numbers. Which one should you trust when analyzing real estate deals? While this could be a fairly lengthy topic of debate, almost all investors agree that pro forma financials, while helpful, shouldn’t be the only thing you base your calculations on. Smart real estate investors use the different scenarios that Ashley brings up in this video to make sure they’re getting a steal of a deal and not a dud.

While pro forma financials are rarely given out on the residential side, they’re fairly common in the world of commercial real estate investing. So, if you’re looking at a duplex, you’ll most likely have to run your own pro forma. But, if you’re thinking of acquiring a self storage facility, warehouse, or large multifamily investment, you can expect the seller’s broker to provide a pro forma.

As always, remember to “trust, but verify” your numbers, especially when they come from a party not loyal to your end goals!

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Want to Be a Guest on the Real Estate Rookie Podcast?

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Join the Real Estate Rookie Facebook Group:

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Use the BiggerPockets Tools on Your Next Investment Property:
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Building a Pro Forma, an Essential Skill for Real Estate Investors:

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How Much CapEx Do You Need to Include in Your Pro Forma?

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Episode 150

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