All Forum Posts by: Brandon Hunsaker

Awesome yes that makes a lot of sense thanks so much! So I understand it to mean that the NOI is just comparing the income to the operating expenses and does not include possible financing expenses since financing does not change the value of the property.

I was using the BP Rental Calculator to analyze an owner occupied rental property. My NOI came out much higher than I expected. I noticed that when I calculated the numbers manually I could get the same NOI if I left out the monthly mortgage expenses of "principal & interest". Why is the "principal & interest" of a mortgage not calculated in the expense portion of an NOI calculation?

Thank you @Upen Patel that is very helpful information!

@Megan Hodges...I agree with @Aaron K., unless maybe if you were to do Live and Flip but I don't think it would give you the money fast enough for what you want to do because you would have to live in the flip for at least 2 years to avoid the capital gains tax.  Possibly a househack live and flip aka ("Blended Househack" by Ben Leybovich in his book "House Hacking") could be a possibility but otherwise I would just do a rental property.  If you are looking to accelerate your income to be able to get a rental property I would look into a side hustle.  It may not be as fast as a potential flip but it has a lot less risk.  @Mindy Jensen and @Scott Trench talk about how to use side hustles to save up money in episode 9 of The Money Show podcast which is a companion to the Bigger Pockets podcast.  Mindy Jensen from Bigger Pockets started The Money Show podcast with the purpose of helping ordinary new investors learn how to get the money safely to get started in real estate investing.  

BP Podcast 259:  Old School Investing Wisdom...with Mike Anderson gives good advice on this question.  Mike compares different situations of when you want to cashflow as much as possible vs. when you want to pay off your debt faster.

Read "House Hacking" by Ben Leybovich.  Its about how to get started in vacation rentals and minimize your risk.  Ben does a good job of outlining a good way to get into vacation rentals without putting all your eggs into one basket.  Its a quick read but has a gold mine of info for the beginner investor who wants to be conservative.  It should be available on the BP website or on Amazon.

203K sounds good I like that it is only 3.5% down.  Can it be used on a home that is not a fixer upper?  The home I have under contract is in good shape I just need to remodel the basement so that someone could live down there.

Also, maybe use a side hustle so that you can start saving additional income.  If you can stock up 3 to 6 months of savings it will greatly help minimize the risk.  The Money Show podcast by Mindy Jenson and Scott Trench gives great advice on how to earn additional income and save money so that you can use it for a down payment eventually.  The Money Show mainly talks about how to develop good financial habits that are needed by a real estate investor.

Hi Deondre!  There's a lot of ways to get started but that's what can make it so overwhelming too because its hard to know where to start!  LListen to BP episode 276 "Vaccum the Truck" if you haven't done so already.  Its motivational and talks a bit about how to get started.  Also episode 290 is really good too.   Brandon Turner and David Green talk about 7 ways to get into real estate.  Also, find a lender and a real estate agent to start working with.  The lender is kind of a first step because they can help you know how much money you can qualify to borrow and that's what gets the wheels moving with being able to set goals and analyze properties.  Then the realtor's job is to find you properties to look at once you know what your budget is.  There are other ways to get financing besides a traditional mortgage I just mentioned that idea because its the easiest way to get started.  By finding a good lender they can help you start setting financial goals to obtain real estate.  I would recommend a house hack maybe for your first real estate deal because it generally is the cheapest, easiest way to becoming an investor.  Read "House Hacking" by Ben Leybovich.  Its a simple short book with a lot of valuable info in it geared to new real estate investors.  You can get a copy of it on the BP website or on Amazon.  This is how I got into real estate investing but there are other creative ways to get into it too.    

I have a house under contract with a walk out basement that I want to make into a studio apartment for a house hack. Does anyone know of anyway that I can finance the remodel using either a conventional or FHA mortgage?