All Forum Posts by: Kim Cooper

After I Buy, Rehab and then Refinance, can I really take that refinancing money and place it into another property? I thought if you refinance a property there are restrictions on what you can use that money for.  I thought you could only use that money for THAT specific property again.  Do some banks have certain restrictions and some do not? Or, is that money free to what ever I want with it, whether I purchase another property or buy a million shoes? (just an example, I would never buy a million shoes). 

Thank you Justin for the concise answer!!!! 

I feel like I am taking crazy pills over here.  I am trying to find a concise answer, but I keep finding answers that contradict each other.  So, I hope this forum will help.  I am super new to all this so thanks in advance. 

QUESTIONS:

1. Does ROI include your mortgage (principle and interest) on a property that you finance? 

2. Does Cash-on-Cash include your mortgage (principle and interest) on a property that you finance?

I realize that Cash-on-Cash is a type of ROI, but I am working off these assumptions:

Simple ROI = (rental income - vacancy - expenses) / (purchase price + closing costs + repairs/renovations)

Cash-on-Cash = (rental income - vacancy - expenses) / total amount of cash actually invested into the property

Basically, do you count mortgage (principle and interest) as an expense for both ROI and Cash-on-Cash?

Should NOI subtract mortgage interest as an expense? The NOI formula that I am working off of is:

NOI = Pre-tax annual rent income + other income - vacancy - operating expenses.

Is mortgage interest included in NOI? In my head, it is clearly an expense, but where exactly am I accounting for this expense? In NOI or somewhere else? TIA!

Can someone give me examples of what would be included in an Inventory Account for a property rental business?  All I can think of would be furniture that I may or may not use to furnish an apartment for extra rent.  What other examples would there be?  Or am I thinking of it wrong?  Do I count each property as apart of inventory?