T-12

T-12 (Trailing 12 Months) is the actual financial performance of a property for the most recent 12 months. It is the most important document in due diligence for income-producing property. The T-12 operating statement shows month-by-month gross rent collected, vacancy losses, and each operating expense category. It is used to calculate actual (not proforma) NOI and to validate the seller's representations. Request the T-12 from the seller supported by bank statements showing deposits. Discrepancies between stated and actual collections are a negotiation point. In seller-financed acquisitions, the T-12 NOI is the basis for setting note terms - the debt service must be supportable by real income, not projections.