Verify The Numbers Before You Buy

Ever seen the movie Liar Liar with Jim Carrey?

That’s what you should think of when you receive financial information from the seller. Watch this video to find out things to look for when analyzing a real estate deal.

 

What’s the WORST example of wrong financial info you’ve ever seen?

Leave a comment below and let me know!

 

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Paul Blacquiere

Paul is an entrepreneur, investor, speaker, and educator.
He's experienced in multi-family properties, renovation, flips,
joint ventures, and is Canada's top RRSP mortgage expert.
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  • Dave Condon says:

    Hi Paul, That is great information, and they say the numbers don’t lie. Thank you for sharing.
    Dave from Kamloops.

    • Paul Blacquiere says:

      Thanks Dave. It might be more accurate to say “accurate numbers don’t lie”, as I’ve seen too many examples of wrong numbers!

  • Allan Turner says:

    Hi, some great points to keep in mind. I especially like the part on property taxes. If it has been re evaluated in the last year that # could be significantly different from the year before.

    • Paul Blacquiere says:

      That is so true! I remember awhile back the City of Ottawa decided to increase property taxes, and my small multi-units got hit hard — increases of over 30%! Imagine if I had been buying those properties, and counting on the tax expense being accurate to ensure positive cashflow…

  • Murray Lampert says:

    Worst example of being LIED to with regards to financials on an investment? A real estate salesperson whom I knew personally and (I believe without malice) gave me numbers that were totally out of whack with reality for the area…. showing excessive return on the property. Turns out the property was owned by a corporation owned by a group of doctors who were renting the building to themselves, doing zero upkeep and paying themselves high rents, etc. Made it look like the property was worth twice what the actual value was. Due dilligence. Due dilligence.

    • Paul Blacquiere says:

      Wow, now that’s an extreme example and certainly a ‘creative’ way to increase the value of your building LOL

      I’ll say it again… I’ve NEVER seen the numbers on a listing be correct. Usually they are off by a bit, but sometimes you get people trying to take advantage of others (as is this case) and the numbers are WAAAYYY off.

      Thanks for sharing Murray

      Paul

  • Karen says:

    what is the best method of verifying expense #’s provided by the seller – have them request an annual statement from the utility company?
    – ask seller to have city or town to provide written tax statement for current year

    thank you

    • Paul Blacquiere says:

      Hi Karen,

      I recommend asking for the last 12-24 months worth of utility statements, as well as 1-2 years worth of city tax bills.

      Then go through and make a spreadsheet adding up the amounts on each statement, making sure none of them are missed (you’d be surprised how often that happens) 🙂

      Hope this helps
      Paul


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