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What's in an OM
A complete OM includes the trailing twelve months of operating statements, and for multifamily a current rent roll (Lev). The rent roll lists every tenant in the property (CRE Daily). The trailing twelve months, or T-12, shows the property's previous twelve months of operations (Janover). Around them sit the broker's story, photos and a pro forma: the income the broker expects after a plan is carried out.
The order to read it in
- 01
The date on the rent roll
Lenders put a limit on it: Fannie Mae asks for a rent roll dated within 60 days of the appraiser's inspection (Fannie Mae), Freddie Mac within 30 days of the value date (Freddie Mac). They are lender rules, not a law, but a good yardstick. - 02
Actual income against pro forma
Freddie Mac tells appraisers to say whether a cap rate came from pro forma or from the T-12 (Freddie Mac). Do the same: price on what the building earns now. - 03
Taxes that are about to change
Abatements exempt all or part of an improvement for a set number of years (City of Philadelphia). Find the year one ends and the full bill after it. - 04
The building's condition
Look for a property condition assessment: the property's physical condition and its history (Fannie Mae). Units offline or a system-wide repair change the price more than a point of cap rate. - 05
Then the cap rate, at each price
With the income versions in hand, do the arithmetic below.
The cap rate at each price
A cap rate is net operating income divided by price, the relationship Freddie Mac describes between income and sale price (Freddie Mac). Run it on every version of the income, at the asking price and at the price you would pay.
Worked example, round numbers, not a real deal
What's missing, and how to ask
- A rent roll older than a couple of months, or none at all
- A T-12 that stops before the last quarter
- Taxes shown at today's abated figure with no note on when that ends
- No condition report, or one that mentions a repair without its scope
Ask once, briefly
One line that names what's missing and offers to sign whatever the broker needs works better than a list of every document.
Where Parcel fits
Parcel is a deal inbox that runs on your own Gmail. When a broker's OM and rent roll arrive, they are saved with the deal, and the deal page shows the cap rate at the asking price and at your bid, stretch and walk-away. The reply is drafted for you to send or change.
Questions
Sources
- 1.Offering memorandum in commercial real estate (a lender's definition) · Lev · read November 9, 2026
- 2.Rent roll: definition and meaning · CRE Daily · read November 9, 2026
- 3.Trailing 12 months: definition (a lender's glossary) · Janover · read November 9, 2026
- 4.Multifamily Selling and Servicing Guide, Part II ch. 2: valuation and income · Fannie Mae · read November 9, 2026
- 5.Multifamily underwriting appraisal checklist · Freddie Mac · read November 9, 2026
- 6.Capitalization rate guidance (March 2025) · Freddie Mac Multifamily · read November 9, 2026
- 7.Get a property tax abatement · City of Philadelphia · read November 9, 2026
- 8.Multifamily Guide glossary: property condition assessment · Fannie Mae · read November 9, 2026
Changes
- : First published.