How did Dave Meyer figure the NOI?

Question

https://www.youtube.com/watch?v=DHsbGR4zg5Q

If you watch this video and skip to about 11 minutes in. How in the world does he get the numbers for that NOI. Can someone please explain to me if this calculator is broken, or am I too new to real-estate. I’ve spent all night reading and watching videos on how you accurately calculate NOI and I can’t find why his number is that

Tom Shallcross · Answer

@Ifegwu Sampson Ifegwu - the calculator is spitting that out based off a 88k loan amount, 30yr amortization and rate of 4.25%.  Adjust any three of those data points and the PMNT amount will also adjust.

If you want to create your own calculation you can create a table where you enter the loan amount (note that it's not the purchase price) rate and months of payment.  For the Monthly payment cell, the Excel calculation is =PMT(B2/1200,B3,B1).    B2 is the rate, B3 is the # of months and B1 is what you entered for loan amount.

Loan Amount

$100,000

Annual Rate

4.50%

Number of Payments

360

Monthly Payment

($279.66)

Tom Shallcross · Answer

@Ifegwu Sampson Ifegwu

I didn't watch the video, but looking at the chart you mentioned at the 11 min mark:

Monthly operating expense (without debt service) is 1,459/M

1,459* 12 months = 17,508 annual operating expense

Monthly rent is 2,250.

2,250 * 12 months = 27,000 annual rev

NOI is annual rev - annual operating

27,000 - 17,508 = 9,492 NOI.  I'm $2 off for rounding.

Let me know if that helps.

Ifegwu Sampson Ifegwu · Answer

@Tom Shallcross

I understand now. This leads me to my next question.

I see where he finds the monthly expenses without debts, but how did he calculate the P&I?

I’m doing the math as we speak (clearly I’m new to calculating this all and finding then understanding where all these variables and number equate to certain things)