When a seller's only records are photos of a spiral notebook

A common situation worth understanding: eleven units, one owner since 1996, listed by a broker who has clearly never seen the inside of the books either. A request for two years of profit and loss statements and trailing twelve months of rent collections comes back as four photos. Two of a spiral notebook, one of a bank statement with a coffee ring on it, and one that is somehow a photo of a computer screen showing a spreadsheet, taken at an angle. The notebook itself is often the useful part. Dates, unit numbers, amounts, initials, an owner's handwritten record of every rent payment for years, legible and consistent. What tends to be missing is the expense side, beyond a running note at the bottom of some pages like "pd Ray 300." In a case like this, underwriting has to come from the bank statements instead, once they are provided directly, plus tax bills, insurance declarations pages, and a utility history pulled from the water department. The expense number that emerges is often 12 to 15 points of gross higher than the notebook implied, mostly because a long-time owner-operator has been doing his own maintenance for twenty years and never charged himself for it. This is not concealment, usually. An owner who never needed a loan and never sold anything simply never had a reason to produce a P&L. The lesson for a buyer is to rebuild the operating picture independently from bank records and public data rather than relying on an informal ledger, however careful it looks.