# NOI is not making sense on BP Calculator

2 Replies

Hey Everyone,

I am have a hard time figuring out the calculation for NOI on the BP rental calculator. I've put in dummy values to see if I can reproduce the calculations myself but NOI is not coming out right.

I understand that NOI should be income - expenses (def. NOI equals all revenue from the property, minus all reasonably necessary operating expenses). When I do just thatthe NOI comes out to -15. 1100 - 1413 + 298 (adding to exclude P & I) = -15.

Purchase: 50000

ARV: 75000

Reported Returns (cap returns checkout assuming NOI=-210):

• NOI: \$210 ???
• CoC ROI: 17.25%
• Pro forma cap: 0.28%
• Purchase cap: 0.42%

Example Income: \$1100

Example Expenses:

Total expenses: \$1,413

• Mortgage: \$296
• Taxes: \$8
• Insurance: \$8
• Variable expenses: \$401
• Fixed expenses: \$700

Fixed expenses: \$700

• electricity: \$100
• gas: \$0
• water & sewer: \$100
• hoa fees: \$400
• garbage: \$100
• Other: \$0

Variable expenses: \$401

• Vacancy: \$77
• Maintenance: \$110
• CapEx: \$110
• Management fees: \$104

Financing, P&I, is Not counted as an expense for NOI calculations....that gets you Cash Flow.

Using the numbers above, wouldn't cashflow be 1100 - 1413? Which is -313 and not -15?