Episode 49: Analyzing Historical Performance and Trends

Building Passive Income

00:00 / 00:19:03

Welcome to Building Passive Income with CREI Collin.

One year of data does not tell the full story.

In this episode, CREI Collin explains why you need to review at least three years of historical performance to truly understand a property. You will learn how to identify trends, spot hidden risks, and make more informed projections.

If you want to evaluate deals with confidence, this episode shows you how to read the story behind the numbers.

In This Episode, You’ll Learn:

• Why historical performance matters more than a single year of data

• How many years of data to review and what documents to request

• Key metrics to analyze, including income, occupancy, rent growth, expenses, and NOI

• How to identify patterns and compare property performance to the submarket

• Red flags that only appear in multi-year analysis

• How to use historical data to project future performance

• How to stress test assumptions based on past trends

Key Topics Covered:

[00:00] Introduction – Why one year of data is not enough

[01:30] Real-world example of misleading short-term performance

[03:45] What data to request and how many years to review

[05:00] Key metrics to analyze over time

[07:00] Step-by-step trend analysis

[09:00] Red flags revealed through historical data

[11:00] Case study: 25-unit property analysis

[13:00] Using trends to inform decisions

[14:00] Recap and next episode

Key Takeaways: Analyzing Historical Performance

Review at Least Three Years of Data

✅ Three years is typically enough to identify meaningful trends

Request:

• Operating statements
• Tax returns
• Rent rolls
• Bank statements

Calculate Year-Over-Year Growth

For each metric, calculate annual changes:

• Income
• Occupancy
• Rent
• Expenses
• NOI

Look for consistency, not just growth.

Compare to the Submarket

Always compare property performance to the local submarket.

✅ If the market grows at 3% and the property grows at 5%, that is strong

⚠️ If the property underperforms the market, investigate why

Watch Expense Growth Carefully

❗ If expenses grow faster than income, NOI will shrink

This often signals poor management or rising cost pressure

Declining Occupancy Is a Major Warning Sign

⚠️ A drop from 95% to 85% occupancy is significant

This could indicate:

• Market weakness
• Property condition issues
• Management problems

No CapEx Can Mean Deferred Maintenance

❗ If no capital improvements were made, costs may be coming

Plan for future repairs and upgrades

Use Trends, But Stay Conservative

Historical trends help inform projections

❗ Do not assume past performance will continue

Always validate with current market conditions

Resources Mentioned:

• Historical performance analysis template

• Year-over-year growth formulas

• Market comparison benchmarks

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Disclaimer:

This podcast is for educational purposes only and does not constitute legal, tax, or investment advice. Always consult qualified professionals before making decisions.