What are pro forma financial statements?

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What is your balance sheet going to look like next year? The year after? What about three years from now? Do you care? Many times the answers to these questions are: not sure, no idea, don’t know and yes I care but I don’t have the information to properly answer these questions. It’s very typical for a small or medium sized business to not know what their financial statements are projected to look like over the coming year much less the next three years. Many times they will have a budget (that is usually inconsistent with their historical performance) but haven’t done the work to take the budget one step further and have it flow into an actual set of pro forma financial statements.

What are pro forma financial statements and why do they matter?

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This is proof that we all follow the herd (well most of us)


It’s not often that an LOL means I actually laugh out loud but today was one of those rare moments when I experienced an genuine LOL.  In reading an article in the Financial Post (‘The little guy can’t win’: U.S. families stuck renting as big investors pay cash to snap up homes) I found myself laughing out loud because it seems like only yesterday that the US real estate market (and other markets) were in a free fall.  Read it for yourself and see if you agree and experience an LOL.  Keep in mind I work with private investors who place their capital in real estate and work with borrowers who need mortgages for real estate (which means I also work with banks and lenders).  In 2008 and 2009 when the credit markets froze it was no laughing matter.  Investors couldn’t wait to get rid of properties and borrowers had a very difficult time refinancing their properties because banks and lenders made it hard to get approved.  Not even five years later this article points to a complete turnaround of market sentiment (and facts) which should remind us all that as a herd of people we will always magnify the highs and lows and continue to move together as one. Continue reading “This is proof that we all follow the herd (well most of us)”

CASE STUDY – Land…they are not making more of it

Another big file off our desk this week.  We completed our third transaction for a group that purchases land and then works to increase the value for eventual sale or development.  At a little less than a quarter of an acre the borrower did a great job of negotiating the purchase price and undoubtedly will have a successful development on their hands in the future.  This transaction is interesting for many reasons the least of which is Continue reading “CASE STUDY – Land…they are not making more of it”