What lessons or concepts would you like me to teach you? Tell me below! - Trevor

@jd5787

Жыл бұрын

Hi, DSRA perhaps?

I think I'm calculating DSCR correctly, but does NOI equal revenue subtracted by the annual debt payment? I'm calculating NOI as revenue - operating expenses (excluding debt), and dividing that sum by annual debt payments.

@RealEstateFinanceAcademy

11 ай бұрын

Yes, you’re calculating DSCR correctly ( DSCR = NOI / Annual Debt Service ) But it sounds like you’re not calculating NOI correctly. Check out my NOI video here: kzread.info/dash/bejne/hGeXqc-Soauxlag.html Hope this helps! - Trevor

DSCR isn’t just used for property however and I was trying to determine the formula as a small business owner to produce my own DSCR despite not owning property.

Trevor, thank you for doing these videos! Love your video layout with the pastel colors. Very cool!

@RealEstateFinanceAcademy

4 жыл бұрын

You’re welcome! Thank you for the feedback.

Trevor your videos are very easy to understand… Thank you and keep up the great work.

@RealEstateFinanceAcademy

5 ай бұрын

Glad you like them, Alex. Thanks for the note. - Trevor

Trevor your videos are amazing!! Just remember to lower your teleprompter so you look straight to the camera budy! Amazing work. Thank you so much

@RealEstateFinanceAcademy

2 жыл бұрын

Thank you, Jose!

Great video. The teaching method and visual is very helpful. Thank you!

@RealEstateFinanceAcademy

4 жыл бұрын

My pleasure! Happy to hear they are helpful. Thanks for the note! - Trevor

Thanks so much for the explanation and the drawing board. I've been playing around with some of the calculators on some commercial real estate sites and I did not know what the dscr meant. Was trying to figure it out by plugging in different numbers but the negative (-) output that the calculator giving me was confusing me. Now I understand that the negative number is just the debt of the monthly mortgage payment (capped)

@RealEstateFinanceAcademy

2 жыл бұрын

Hello! You're welcome. I'm glad you like it!... The best way to think about the positive and negative numbers on your financial calculator is to see them as you would see the cash going in & out of your pocket. For example, if you are a borrower and you are receiving a loan, the loan amount (PV) would be positive cash flow into your pocket, and the loan payments (PMT) would be negative because they are cash out of your pocket back to the lender. The lender's perspective would be the opposite - the cash to the borrower in the beginning (PV) would be negative because it's cash out of their pocket, and the payments back to the lender (PMT) would be positive. Both methods work the same way. I'll post some more videos on using Financial Calculators, and I'll add some free resources on how to use a Financial Calculator on my website trevorcalton.com Thanks again for your comments and for watching! - Trevor

I just realized he is writing mirror writing

Honeslty the most impressive thing about this is writing everything backwards like that

First video I've viewed of yours. Solid explanation and very simple to understand, even for an economist! Thank you, sir!

@RealEstateFinanceAcademy

Жыл бұрын

Thank you Ryan! I appreciate the that! - Trevor

Love the board and pen! That’s so cool

@RealEstateFinanceAcademy

2 жыл бұрын

Thank you!

Coolest screen ever! The future is here! Finally, yet why arent more vids using it?

@RealEstateFinanceAcademy

2 жыл бұрын

Hi! Thank you for the nice comment. I custom built the screen so it would be more visually appealing, easier for my students to see me, and better for me to explain concepts. Glad you like it! - Trevor

A great material and very relevant information fascinated me the way you explain the subject, thank you for sharing, you have all my support!...

@RealEstateFinanceAcademy

2 жыл бұрын

Thank you. I’m glad you liked it! - Trevor

How does this guy write backwards like this. Mind blown

@isnantodahrojatun2352

2 жыл бұрын

How about writing on a wide transparent glass? Some lighting work might help to eliminate the mirror effect.

@cedricrichardson9579

Жыл бұрын

@@isnantodahrojatun2352 you forgot 1 thing , if you record it that way it would be backwards . You have to reverse the video afterwards so it would be readable for us.

Hi, Trevor. What should an average DSCR be for new investors who are using syndicators for their first deal? I'm trying to underwrite deals as a beginner, but I need to know what my dscr should be if I use investors to fund the down payment.

@RealEstateFinanceAcademy

Ай бұрын

Each lender sets their own DSCR, and not all of them will penalize you for having limited partners, so you can stick with 1.25 or add 10 bps to be safe. It really depends on a number of factors - property size, type, location, sponsor strength, etc. - and how they impact overall risk. Connect with me and let’s discuss. Hope that helps! - Trevor

This is so clear and helpful! Thank you for this!

@RealEstateFinanceAcademy

3 жыл бұрын

My pleasure. Glad it was helpful! - Trevor

very helpful thank you!

@RealEstateFinanceAcademy

2 жыл бұрын

You're welcome! Glad you found it helpful! - Trevor

Would you use the Net operating income, EBITDA, or Net income?

@RealEstateFinanceAcademy

4 жыл бұрын

Always use Net Operating Income. EBITDA is effectively the same thing, but that and Net Income are accounting terms, not a real estate terms. Check out my lesson on Net Operating Income for more details. 👍🏻

@nbafashion75

4 жыл бұрын

@@RealEstateFinanceAcademy Im using this ratio to evaluate business acquisitions. Would you still recommend using net operating income or net income? Wouldn't net income be a more true value of how much debt you can service? Since you would still have to pay taxes, and interest regardless?

Hey Trevor, thanks. Very informative. How can I find the tool you're using to write on this clear screen? I'm a flight instructor and would love to make videos like this

@RealEstateFinanceAcademy

5 ай бұрын

Hi! Thanks for the comment. I built that setup myself, but now there are pre-made lightboards that you can buy. Learning Glass is one but that’s all I know. Good luck! - Trevor

Your explanation was fabulous, great video. However, I had one question at the end. If with a NOI of 100,000, a DS or loan amount of 80,000 is obtained annually, why does it result in a loan amount of 1,112,000 over 35 years?

@RealEstateFinanceAcademy

8 ай бұрын

Thank you! The ‘Annual Debt Service’ is 80k. They derive the loan amount by dividing that by 12, determining the maximum monthly payment, then backing into the number of how large of a loan that payment will support. Does that help? - Trevor

@jorgenicolasgonzalez419

8 ай бұрын

@@RealEstateFinanceAcademy Of course, now I understand. By determining the monthly payment, they can calculate how much to borrow for 35 or 30 years. Thank you very much for the response.

Hello, I would like to calculate the maximum amount of debt that my fictitious company can borrow. But how do I determine the respective CFADS if I don't know my interest charge yet? As a tax shield, this has an influence on my tax load and thus on the CFADS. I would be very happy if someone could answer me.

@RealEstateFinanceAcademy

Жыл бұрын

Hi Jan. Happy new year. DSCR is calculated on the PRE-tax cash flow, not your after-tax, and it's specifically for real estate loans. For business loans, you would look at your EBITDA which is Earnings Before Interest, Taxes, Depreciation, and Amortization. In other words, your loan would be based on your PRE-tax cash flow, not after-tax cash flow. The interest expense from the loan will likely lower your tax liability, as well... Hope this helps. If not, feel free to shoot me a note with more questions. - Trevor

Can you make one like this including all the affecting factors but also including how your credit might affect this type of loan? Thanks :)

Trevor! Thank you so much for breaking this down. I was wondering, how do you do the drawing on the board? I make videos in a different genre but I'd love to help more with visuals like this.

@RealEstateFinanceAcademy

2 жыл бұрын

Hi Ashley. Thank you for your comment. I custom built this setup in my studio over the span of a couple years specifically for teaching Finance and drawing diagrams. Glad you like it!

ok... im still impressed how in the world you write backward

@RealEstateFinanceAcademy

2 жыл бұрын

Thank you! Me too! 😂 - Trevor

nice information... I'd love to know how you made this video

Very helpful

@RealEstateFinanceAcademy

Жыл бұрын

Glad to hear that! Thank you! - Trevor

How did you get the purchase value on the second example?

This video is so clear thank you Sir

@RealEstateFinanceAcademy

3 жыл бұрын

My pleasure. Happy to help! - Trevor

Great video! Quick question: how did you calculate the loan amount?

@RealEstateFinanceAcademy

4 жыл бұрын

Hi Feven. Once you have determined the maximum allowable payment, you can back into the loan amount using the interest rate and amortization. Let me know if you have more questions. I can post a step-by-step video. - Trevor

@feventekalegn4531

4 жыл бұрын

Thank you very much, Trevor. This was really helpful, cracked the PL numbers using the allowable payment, interest rate, and amortization :)

Thank you Trevor!

@RealEstateFinanceAcademy

Жыл бұрын

My pleasure Anna Lisa. Thank you for watching! - Trevor

so if your DSCR was 2 and your net operating income is 100k would your annual debt service 200K is that correct ?

@RealEstateFinanceAcademy

4 жыл бұрын

No, divide your NOI by the DSCR, so $100k / 2.0 = $50k maximum annual Debt Service... Side note: A DSCR of 2 is much higher than conventional lenders require. Most only require about 1.2 - 1.4. What type of loan are you looking at? - Trevor

Where did the 1,112,000 come from?

@RealEstateFinanceAcademy

3 жыл бұрын

Using a financial calculator, you can use the maximum payment amount along with the interest rate and amortization period to calculate the loan amount. 👍🏻 If you want help learning how to do that, I have full lessons on that (some are free) at Evergreen.courses

all of the lenders i speak to dont know how to do anything but conf/some do fha too, but nothing beyond this, can you help me?

@user-kn2uw1bu6x

11 ай бұрын

do you know anyone who is qualified to do this type of loan? the ones i find cant do any really and most are scams as i have someone harassing me for years and trying to kill me , i need to move as i need urgent medical care

@RealEstateFinanceAcademy

10 ай бұрын

It sounds like you have been talking to residential home lenders. DSCR loans only apply to income-producing properties, typically commercial properties, with stable cash flow. They are also usually larger loans for properties minimum value $2+ million, but not always. Happy to point you in the right direction if you send more info. - Trevor

so helpful, thank you!

@RealEstateFinanceAcademy

3 жыл бұрын

You’re welcome, Yasmeen. Happy to help! - Trevor

Thanks for sharing

@RealEstateFinanceAcademy

2 жыл бұрын

My pleasure, Miguel! Thanks for your comment! - Trevor

still trying too figure out how he is writing backwards.

@RealEstateFinanceAcademy

2 жыл бұрын

Lots and lots of practice! 😉 - Trevor

Nice job on the video

@RealEstateFinanceAcademy

2 жыл бұрын

Thank you, Ken. Glad you liked it! - Trevor

man how the heck do you do the writing thing on this video. is that a software?

@RealEstateFinanceAcademy

Жыл бұрын

It’s old school. I built that setup trying to figure out how to make Finance just a little bit less boring. 😂👍🏻 - Trevor

@fullmetalfreedom

Жыл бұрын

@@RealEstateFinanceAcademy It's fantastic

@RealEstateFinanceAcademy

Жыл бұрын

Thank you! Glad you like it. Dropping much more content soon! 😄👍🏻

How did you get the 1,112,000 for PL

@RealEstateFinanceAcademy

3 жыл бұрын

Hi!Once you have determined the maximum allowable payment, you can back into the loan amount using the interest rate and amortization. You'll need to know how to use a financial calculator or a spreadsheet to do this. Check out my online courses if you need help with that at evergreen.courses/

Great video

@RealEstateFinanceAcademy

3 жыл бұрын

Thank you!

where did 80k come from

@RealEstateFinanceAcademy

5 жыл бұрын

Hi Alex! If the NOI is $100k and can be a max of 1.25x the annual debt service, then ( 100,000/1.25 = $80,000 ) so the max debt service can be is $80k. Hope that helps.