CREparserHow to review a T12 operating statement
In short: a T12 is a property’s income and expenses for the last twelve months, month by month. To review one, re-add every subtotal and total, recalculate net operating income, compare each line’s months against each other, and turn anything unusual into a question for the seller, with the cells that prompted it.
What is a T12?
A T12, or trailing twelve-month operating statement, lists a property’s income and expenses for each of the last twelve months, with a total for the year. It’s the main evidence of what a property actually earns, as opposed to what an offering memorandum projects.
A typical apartment T12 has:
- Income: gross potential rent, less vacancy loss and concessions, plus other income such as utility reimbursements and parking, giving effective gross income (EGI)
- Expenses: taxes, insurance, utilities, repairs and maintenance, payroll, management fee and administration, giving total operating expenses
- Net operating income (NOI): EGI minus operating expenses
How do you check a T12?
1. Re-add everything
Recalculate every subtotal and total across and down. Spreadsheets are edited by hand, rows get inserted, and a total that doesn’t include every line is more common than it should be.
2. Recalculate NOI
NOI = EGI − total operating expenses, for every month and for the year. Then check the ratios:
- Expense ratio: operating expenses ÷ EGI
- Management fee: fee ÷ EGI (or ÷ collections), against what the management agreement says
- Vacancy: vacancy loss ÷ gross potential rent
3. Compare the months
Look along each line for months that break from the rest. A spike might be a one-off repair, a billing catch-up, a bad estimate or a sign of something wrong. A month that’s missing an expense entirely matters just as much.
4. Ask about what you find
Each unusual month becomes a question: what was it, is it recurring, and are there invoices?
A worked example
The fictional Bayview Court T12 covers a 24-unit apartment building from October 2025 to September 2026:
| Line | 12-month total |
|---|---|
| Gross potential rent | $669,600 |
| Effective gross income | $644,630 |
| Total operating expenses | $228,699 |
| Net operating income | $415,931 |
The ratios:
- Expense ratio: $228,699 ÷ $644,630 = 35.48% of EGI
- Management fee: $19,339 ÷ $644,630 = 3.00% of EGI
- Vacancy loss: $48,800 ÷ $669,600 = 7.3% of gross potential rent
Comparing the months turns up two questions:
- Utilities, February 2026: $7,860, against an average of $3,121.82 for the other eleven months, about 2.5 times. It pulls February’s NOI to the year’s low.
- Repairs and maintenance, June 2026: $4,950, against an average of $2,587.27, about 1.9 times.
Neither is necessarily wrong. A winter spike in utilities may be real; a single large repair may not recur. But each one changes what “normal” NOI looks like, so ask for the invoices behind both.
How does the T12 feed the rest of underwriting?
The T12 is the baseline for testing an offering memorandum. If the memo quotes NOI, expense ratios or occupancy, check them against the T12 and the rent roll. See how to check an offering memorandum.
It’s also the starting point for your own pro forma: adjust for one-off items, re-assessed taxes after sale, new insurance quotes and your own management fee.
Review a T12 in minutes
CREparser Deal Review checks a T12 (Excel, CSV or PDF) inside Claude: it re-adds every total, checks NOI month by month and flags the months that break from the rest, each linked to the cells it came from.
Try it on the sample T12. Your first 5 documents are free.