T12 Financial Review Exchange Planning

We review trailing twelve-month financials on candidate replacement properties for New Orleans 1031 investors before a property earns a spot on your identification list. A seller's T12 tells you what happened. Our job is checking whether it tells you the truth, and whether it will still be true after you own the building, whether that building is a Mid-City fourplex or a warehouse near the port.

The Line Items That Move the Most Here

Insurance is the single biggest variable in a New Orleans T12. A seller who's owned a property for fifteen years might be paying a legacy premium that resets dramatically for a new buyer, especially if the flood or wind policy hasn't been re-shopped recently. We don't quote insurance ourselves, but we flag any premium that looks stale against current market conditions so you're not underwriting off a number that won't survive to your first year of ownership.

Property Tax Reassessment After a Sale Closes

Orleans Parish and the surrounding parishes reassess property values, and a sale at a higher price than the prior assessed value often triggers a reassessment that raises the tax bill after closing. A T12 built on the seller's current tax line can understate what you'll actually pay in year one. We flag properties where the sale price suggests a meaningful reassessment gap so that gets modeled before you commit an identification slot, not discovered afterward. Jefferson Parish and St. Tammany Parish run their own reassessment cycles on a different schedule than Orleans Parish, so a candidate near a parish line needs its tax projection checked against the correct assessor's practice rather than assumed from a neighboring property.

Hospitality and Tourism-Adjacent Income Swings

If a candidate property has any income tied to hospitality — a restaurant tenant, retail near a hotel corridor, or short-term rental units — the T12 needs to be read month by month, not as an annual average. Convention calendars, cruise ship schedules, and even a single slow Mardi Gras season can swing monthly income noticeably. We separate stable base rent from anything riding on tourism volume so the underwriting reflects the real risk profile.

• Base rent from signed leases
• Percentage rent tied to tenant sales
• Utility and CAM reimbursements
• One-time items like lease termination fees
• Repairs and maintenance trends over the full period

Repairs and Deferred Maintenance in the Numbers

A T12 with unusually low repair spending in an older New Orleans building is often a sign of deferred maintenance rather than a well-maintained asset, particularly on roofs and drainage given the amount of rain this market gets. We compare repair spending against the building's age and construction type, and we ask for capital expenditure history separately from operating repairs so nothing gets buried in a single line item. On buildings with raised foundations common to older doubles and cottages, we also check whether crawlspace and pier maintenance appears anywhere in the repair history, since neglect there can be expensive to correct after closing even though it rarely shows up as its own T12 line item.

Building a Lender-Ready Package

If you're financing the replacement property, your lender will want a normalized T12 with these adjustments already made. We prepare that summary alongside the raw seller numbers so your loan application isn't held up while an underwriter asks the same questions we've already answered.

Reading a T12 on Industrial and Medical Candidates

A T12 on a river-corridor industrial building needs its own line-item scrutiny for dock and rail maintenance costs, which can be lumpy year to year and easy to understate if only a single trailing year is reviewed. A medical office T12 needs the same kind of scrutiny on plumbing and HVAC repairs tied to sensitive equipment, since a single major repair year can either overstate ongoing costs or mask a building that's overdue for the same kind of work again soon. We ask for at least two years of trailing financials on both categories rather than relying on the most recent twelve months alone.

Common 1031 Exchange Questions

Why does insurance matter more in a New Orleans T12 than elsewhere?

Flood and wind coverage costs here can be substantial and can change significantly for a new buyer versus a long-term owner with a legacy policy. We flag stale premiums so they get re-underwritten before you commit.

Will my property taxes go up after I buy the replacement property?

Possibly, if the sale price is meaningfully higher than the current assessed value. We flag that gap so it's modeled into your numbers rather than discovered after closing.

How do you handle income from a restaurant or retail tenant tied to tourism?

We review it month by month rather than as an annual average, since convention and tourism calendars create real swings that an annual number can hide.

What if the seller's repair line looks unusually low?

That's often a sign of deferred maintenance rather than good upkeep, especially on older roofs and drainage systems. We flag it for a closer physical inspection.

Can you prepare financials my lender will accept?

We prepare a normalized summary alongside the seller's raw numbers, but your lender's underwriting team makes the final call on what they'll accept.

Why do industrial and medical office T12s need more than one trailing year?

Dock, rail, and specialized mechanical repair costs on these property types tend to be lumpy rather than steady, so a single year can understate or overstate the ongoing repair budget compared to a two-year average.

Ready to organize the exchange file?