What is a T12 in multifamily investing?

Good question.

A T12 is a financial report that shows the trailing twelve months (TTM) financial history for the multifamily property. It is important to study this report to get a sense of what is happening with income and expenses on a potential acquisition.

A T12 contains the financial history of a property for the preceding twelve months, while a T3 contains the financials of a property for the last three months.

It is important to understand these terms since the general partner you choose to invest with might mention them when explaining the deal.

The first line item on a T12 document is a property’s gross potential rent (GPR), which consists of the number of units multiplied by the market rent. Let’s say a unit has 100 units, each of which is rented out for $1,000 a month at market prices. In this example, the GPR would be 100 * $1,000 * 12 = $1,200,000.

Some allowances for bad debt and vacancy are also included. You also will see some additional income items shown like pet rent, late fees, etc.

Expenses such as management fees, repairs and maintenance, insurance, property taxes, etc are also included in this report.

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I hope that helps and good luck with your investing!

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