The seller sent me a P&L that was a photo of a spiral notebook

Eleven units, one owner since 1996, listed by a broker who clearly had never seen the inside of the books either. I asked for two years of profit and loss statements and trailing twelve months of rent collections.

What came back was four photos. Two of a spiral notebook, one of a bank statement with a coffee ring on it, and one that was somehow a photo of a computer screen showing a spreadsheet, taken at an angle.

The notebook was actually pretty good. Dates, unit numbers, amounts, initials. The man had been writing down every rent payment for years in handwriting you could read. What wasn't there was anything on the expense side except a running note at the bottom of some pages that said things like "pd Ray 300."

So I couldn't underwrite it from the books. I underwrote it from the bank statements instead, which he did send once I asked for them directly, and from the tax bills and the insurance declarations page and a utility history I got from the water department. The number I came up with for expenses was about 14 points of the gross higher than his notebook implied, mostly because he'd been doing his own maintenance for twenty years and had never charged himself for it.

He wasn't hiding anything. He just never had a reason to make a P&L, because he never needed a loan and never sold anything. His son does his taxes.

I didn't buy it. Somebody did. I hope they got the water history.