Key Takeaways
- Listing data can mislead through omission, selective presentation, and manipulation of photos and statistics.
- Broker pro formas overstate NOI by an average of 15-30% through inflated rents and minimized expenses.
- Always build your own pro forma using verified data: T12 rent rolls, actual expense receipts, and independent condition assessments.
- The gap between the broker pro forma and your verified analysis is the "credibility gap" — this is where value (or risk) hides.
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Test Your Knowledge
1.By how much do broker pro formas typically overstate NOI?
2.What is the "credibility gap" in property analysis?
3.What document shows actual collected rents versus scheduled or market rents?