November 15, 2021

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Amortized vs. Interest-Only Payments

Amortized vs. Interest-Only Payments

An amortized loan is a loan that follows an amortization schedule of equal monthly payments. The loan’s balance will be paid in full by the maturity date.

Net operating income NOI

Net Operating Income (NOI) Guide for Real Estate Investors

Net operating income (NOI) is a key metric used to determine the profitability of an individual investment property or portfolio of properties. NOI is the difference between a property’s gross operating income and operating expenses.

Delaware Limited Liability Company – Real Estate Guide

Most lenders require real estate investors to form a Delaware LLC specifically for the property or properties on the loan or line of credit. A Delaware LLC protects both the borrower, lender, and the assets. Most private lenders will require borrowers to form a new business entity. Especially private lenders that deal with large real estate loans. The most recommend business entity by lenders is a Delaware LLC.

Individual vs Entity

Real estate investors applying for a mortgage on a single property aren’t required to form a business entity when going through the bank. However, individual investors can’t seek a loan through a private lender as most
private lenders will require a newly formed business entity.

Entity Types – Real Estate Guide

Real estate investors can benefit tremendously from the formation of a business entity such as an s-corporation, limited liability company, and special purpose entity.

Capitalization Rate (CAPR) Definition

The capitalization rate is a metric in the form of a percentage used to reveal the rate of return of the investment property over a one-year time span. The CAP rate is shaped by the net operating income and the appraised value of the property.