Financial Statement Prep for Property Sale > 자유게시판

When a property owner opts to sell, the financial statements included with the sale typically act as the conduit connecting the seller’s aims with the buyer’s confidence

A tidy, precise, and well‑organized set of statements can accelerate the sale, lessen negotiation friction, and enable the seller to secure the best possible price

Here is a practical guide to preparing those financial statements, covering what to include basics through the intricacies of tax and regulatory compliance

1. Understand the Audience

The first step involves determining who will view the statements

Potential buyers span from individual investors and homebuyers to institutional lenders and real‑estate investment trusts (REITs)

Although the core information stays consistent, the depth and format can vary

For example, 名古屋市東区 不動産売却 相談 a real‑estate developer will want detailed cash‑flow projections, whereas a private buyer may focus on historic rent rolls and maintenance costs

Adapt the presentation to satisfy the expectations of your target buyer group

2. Collect Essential Data

Accumulate the following key data sets, ensuring you have records spanning at least the last 12–24 months

- Purchase price history and any major capital improvements

end dates, escalation clauses, and security deposit balances

Operating expense records: utilities, taxes, insurance, property management fees, repairs, and capital reserve contributions

Mortgage statements and loan amortization schedules, if relevant

Tax returns, including property and income, for the past few years

Insurance policies and claim history

- Any pending litigation or zoning issues

A complete data set lowers the risk of surprises during due diligence

3. Select Appropriate Statement Types

You’ll have to produce at least three essential statements for a property sale

- Income Statement (Profit & Loss) – Shows operating income, expenses, and net operating income (NOI)

Balance Sheet – Offers a snapshot of assets, liabilities, and equity at a specific moment

Cash Flow Statement – Depicts cash inflows and outflows, particularly useful for buyers assessing financing options

In addition, consider adding a Rent Roll Summary, a Capital Expenditure (CapEx) Log, and a Tax Summary

These additional documents enable buyers to explore further without overloading them with raw data

4. Construct the Income Statement

Begin with gross rental income: total rent collected during the period

Remove vacancy and credit losses: estimate a realistic vacancy rate (typically 5–10% for commercial properties; 2–5% for residential) and any bad‑debt write‑offs

3. Deduct operating expenses: utilities, taxes, insurance, maintenance, property management, marketing, and any other recurring costs

Determine Net Operating Income (NOI): the amount left after operating expenses but before debt service and taxes

Deduct any debt service (principal and interest payments)

6. Add or subtract any non‑operating income or expenses (e.g., sale of equipment, one‑time legal fees)

7. Arrive at Net Income: the figure that indicates profitability after all costs

Show the income statement in a clear, columnar format with amounts in the primary currency

Add footnotes for any unusual items or one‑time expenses

5. Create the Balance Sheet

Assets:

- Current assets: cash, accounts receivable, security deposits held in escrow

Fixed assets: property's fair market value less accumulated depreciation (include the depreciation schedule if the property is depreciable)

Other assets include intangible assets such as leasehold improvements

Liabilities:

Current liabilities: accounts payable, accrued expenses, and short‑term debt

Long‑term liabilities include mortgage balances, deferred tax liabilities

Equity:

- Owner’s equity: purchase price, retained earnings, any capital contributions

Ensure that assets equal liabilities plus equity

Provide a brief narrative explaining significant items, such as pending appraisals or lease renewals

6. Create the Cash Flow Statement

Divide the cash flows into three categories

Operating activities: cash from rents less operating cash outflows

Investing activities: cash used for capital improvements, purchase or sale of ancillary assets

Financing activities: mortgage payments, new debt issuance, or equity injections

Display how cash balances shift over the reporting period and spotlight any periods of negative cash flow that could alarm buyers

7. Create the Rent Roll Summary

List each tenant, lease start and end dates, rent amount, escalation terms, security deposit, and any other special clauses

Highlight:

- Current occupancy rate

How close leases are to expiration

- Rent growth trajectory over time

A tidy rent roll can assure buyers of income stream stability

8. Prepare the CapEx Log

Include a chronological list of all major capital expenditures in the past few years: roof replacements, HVAC upgrades, parking lot resurfacing, etc.

List the cost, date, and purpose for every entry

Buyers typically use this to gauge future maintenance needs and determine the replacement reserve

9. Provide a Tax Summary

Provide a concise tax summary

- Property tax assessments and payment history

- Income tax returns (if the property is held in a corporate structure)

Any tax credits or incentives, for example low‑income housing credits or energy‑efficiency rebates

If the property is expected to be sold at a gain, include an estimate of capital gains taxes

This helps buyers factor potential tax liabilities into their offer

10. Check Accuracy and Consistency

Cross‑check all figures across the statements

For instance, the net cash inflow from the cash flow statement ought to reconcile with changes in the balance sheet’s cash account

Use a spreadsheet to automate these checks and flag discrepancies

11. Include Narrative Explanations

Although numbers convey part of the story, narrative context can add clarity

Explain:

- Why certain expenses spiked (e.g., a costly roof replacement)

Any lease renegotiations that changed rent schedules

Market trends that affect rental rates

A well‑written narrative can pre‑empt buyer questions and demonstrate transparency

12. Ensure Readable Formatting

Stick to a simple, professional layout