What is a T-12 in real estate?

A T-12 (Trailing Twelve Months) is an operating statement showing the last 12 months of income and expenses for a property. Lenders use it to calculate Net Operating Income (NOI) and determine loan amounts. Bhumi provides forensic T-12 audits that reconcile every line item to bank statements.

How long does a T-12 audit take?

Bhumi delivers a complete, lender-ready T-12 package within 48 hours of receiving your documents. Full forensic reconstruction typically takes 1-2 weeks. Deal closing support runs approximately 30 days.

What size multifamily portfolios does Bhumi work with?

Bhumi specializes in $500K to $5M multifamily portfolios with 5-50 units. This is the sweet spot where institutional lenders require documentation but owners often lack institutional-grade bookkeeping - too complex for most accountants, too small for institutional advisors.

What documents do I need to start a T-12 audit?

To start, Bhumi needs three things: 12 months of bank statements for all accounts touching the property, a current rent roll showing units, tenants, and rent amounts, and your most recent tax return or Schedule E for the property.

How much does a T-12 audit cost?

Bhumi charges a flat fee based on portfolio complexity - number of units, bank accounts, and document condition. No hourly billing surprises. Contact for a specific quote based on your situation.

What lenders does Bhumi work with?

Bhumi is lender-agnostic and has prepared packages for Freddie Mac Small Balance Loans, Fannie Mae Small Loans, regional banks, credit unions, and private lenders. The documentation standards are tailored to each lender's requirements.

What is NOI variance and why does it matter?

NOI variance is the gap between what your T-12 operating statement shows and what your bank deposits prove. Lenders require zero variance for loan approval. Bhumi's forensic reconciliation traces every dollar of revenue to a specific bank deposit, eliminating phantom income and protecting your loan amount.

Can Bhumi help with inherited real estate portfolios?

Yes. Bhumi specializes in inherited portfolios where the previous generation ran operations manually. We've handled portfolios with Venmo payments, cash deposits with no paper trail, commingled personal and business expenses, and decades of accumulated documentation gaps.

The Settlement Audit: Finding $15,000 in the 'Boring' PDF

Definition

Settlement Statement Audit: A forensic line-by-line review of the ALTA or Closing Disclosure draft. The goal is to verify that every proration, credit, and transfer matches the contract terms and the actual operational reality of the rent roll.

48 hours before closing, you receive a PDF from the title company. It's 15 pages of numbers. You are exhausted. You just want to wire the money and get the keys.

Stop.

This document—the Settlement Statement—is the final checkpoint. Once you sign it and the wire hits, any money left on the table is gone forever. In our experience, roughly 60% of first drafts contain errors favoring the seller.

The "Checked Out" Dynamic

Why are there so many errors? It's not malice; it's exhaustion.

The Seller has mentally moved to the Bahamas.
The Buyer is frantically coordinating insurance and wires.
The Title Clerk is juggling 15 other closings this month.

The title clerk is often plugging numbers into software based on a cursory glance at a rent roll. If you don't check their math, nobody will.

Leak #1: The Rent Proration Trap

Standard contracts state that rents collected by the seller for the month of closing are prorated. If you close on the 15th, you get credit for the 15th–30th.

The Error:

The title company uses the Gross Potential Rent from the T-12 or the Rent Roll summary, rather than the actual collected rent.

The "Delinquency" Exception: Most contracts say you only get a credit for rent actually collected. If Unit 105 hasn't paid rent, the seller shouldn't give you a credit. But conversely, if Unit 105 pre-paid for next month, you are owed 100% of that.

You must cross-reference the proration line with the current receivables report.

Leak #2: The Hidden Deposits

You see "Security Deposits: $15,000" on the statement. Looks right. But digging deeper:

Pet Deposits: Are they refundable? If so, they must transfer. Often missed.
Key Fob Deposits: A $50 deposit for 100 units is $5,000. Often missed.
Last Month's Rent: If the tenant paid last month's rent at lease signing, that is a liability holding. It must transfer.

We recently audited a settlement where the seller kept $4,200 in "Pet Fees" that were actually refundable "Pet Deposits" per the lease. One word change saved the buyer $4,200.

Leak #3: The Tax Assessment Lag

Property taxes are prorated based on the current tax bill. But in many jurisdictions, the specific act of buying the property triggers a reassessment.

If your contract allows, you should ask for a reprobation credit based on the estimated new value, not the old value. Otherwise, you are taking a credit based on a $1M value, but you'll pay a bill based on a $2M value.

The Audit Checklist

When Bhumi reviews a settlement statement, we open three monitors:

Monitor 1: The Draft ALTA Statement.
Monitor 2: The Purchase & Sale Agreement (PSA).
Monitor 3: The Latest Rent Roll & Bank Statements.

We verify:

Did the Earnest Money Deposit (EMD) credit correctly?
Are all "Seller Credits" from the physical due diligence negotiation included?
Are utility readings final? (Water bills are liens in some states).
Is the loan amount exactly matching the Commitment Letter?

The Final 5%

Real estate is a game of margins. You work hard to find a deal that yields 8%. Don't let 0.5% of your equity leak out because you didn't check the math on a "boring" PDF.

Trust, but Audit. The title company is a neutral third party, but they are human. It is your money. Count it.