Welcome to passive real estate investing, the show where busy people like you learn

how to build substantial passive income while creating wealth for the long term.

And now here's your host, Marco Santorelli.

Hello my friends and welcome to another episode. Now here's your host, Marco Santorelli.

Hello, my friends, and welcome to another episode

of Ask Marco, where I answer your investing related questions.

Today's question is an interesting one,

and it comes from Victor he's basically wondering what

should we pay ourselves from our rental property now this is a good question and

one that will come up at some point in time it's not a matter of if but when as you start to

invest or continue to invest in real estate but Victor goes on to say Marco I'm an avid

listener of your podcast the content has been very helpful, influential, and actually

has helped me structure my first deal. You're very welcome, Victor. My sister and I are partners and just

recently closed on our first deal together. Congratulations. It is a seller-financed

mortgage of three single-family homes, two of which are occupied, the third

will be ready in a couple of weeks. The projected net operating income is about $10,000 a year. This is only

deducting principal interest tax and insurance, which let me correct you on that. That is not how you calculate NOI but I'll get to that

after I read your email here we are managing the properties ourselves I'm not sure if that is the standard way to calculate your NOI because I know

most successful investors like to factor vacancy, reserves for repairs, and

other miscellaneous categories, but to us it seems more simplistic. At least in the

beginning to not spend anything and keep every dollar earned from the rents

after principal interest tax and insurance, also known as PITI, as a reserves for any repairs and also

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