A real estate Pro Forma is a projection of the cash flow of the potential investment property. Notably, when investors are searching for potential properties for investment in real estate, they will, first of all, consider the Pro Forma. The Pro Forma allows the investor to evaluate the overall property profitability.
Since the seller wants the property to be bought by the investor, he/she usually frames the Pro Forma. Importantly, this is done in order to make the cash flow look as positive as much as possible. Concurrently, what this means is that a lot of consideration which is key may have been omitted or in other words, they are oversimplified. All this is in the effort to attract the investor. Therefore, the final decision in the purchase of the real estate … Read more