In commercial real estate, Net Operating Income (NOI) is everything—but too many investors get it wrong. In this episode of Commercially Speaking, Bo and Timmy Barron deliver a NOI masterclass, breaking down how to calculate it, why it matters, and how to avoid common mistakes that could cost you so many thousands.

You’ll learn not only how to find NOI but how to use it to:

✅ Value properties with confidence using the NOI-to-cap rate formula

✅ Spot opportunities in underperforming assets with low NOI

✅ Win deals faster by presenting NOI-backed proposals to lenders

✅ Measure performance and maximize returns over time

📊 Plus: Timmy gets a pop quiz (and passes!), and the brothers share a real-world case study of using NOI to price a duplex portfolio.

🎧 Get this essential CRE knowledge—listen now on Spotify, Apple Podcasts, or YouTube!

————————————

📘 Resources Mentioned:

• 🎓 CRE Marketing Mastermind with Wes Gay – Join the waitlist: wesgay.com/cs
• 🥏Tizbee: All Disc, No Balls! – (www.tizbee.com)
• 🛠️ CCIM Learning Resources – Master CRE fundamentals
• 🧠 SuperpowersHQ – Get an EA who understands CRE (superpowershq.com/commerciallyspeaking)
• 💡 Massimo Group – World-class coaching for CRE brokers: massimo-group.com
• 🛠️ Site to Do Business (STDB) – Powerful CRE analysis and mapping tools: stdb.com
• 📊 APOD Worksheet (Annual Property Operating Data) – The key tool for calculating NOI

———————————-

⏰ Time Code ⏰

00:00:00 – Start
00:01:51 – Happy Birthday, Bo!
00:03:33 – Tizbee.com
00:05:21 – wesgay.com/CS
00:09:59 – Shoutout to McNeill Stout for Today’s Topic
00:13:26 – Net Operating Income (NOI) & 7 Reasons Why It’s Important
00:15:07 – 1. Profitability Indicator
00:16:12 – 2. Evaluation Tool
00:20:24 – 3. Investment Decision Making
00:22:37 – 4. Financing Opportunities
00:24:08 – Debt Service Coverage Ratio (DSCR)
00:26:21 – 5. Performance Measurement
00:27:27 – 6. Cap Rate Calculation
00:27:45 – 7. Cash Flow Estimation
00:29:26 – APOD – NOI Formula Break Down
00:30:29 – Line 1: Potential Rental Income (PRI)
00:31:01 – Line 2: Less Vacancy and CR Loses
00:32:41 – Line 3: Effective Rental Income
00:33:18 – Line 4: Other Income
00:37:02 – Line 5: Gross Operating Income
00:37:40 – Line 6+: Breaking Down The Operating Expenses
00:44:15 – Operating Expense Vs Capital Expense
00:46:21 – Line 30: NET OPERATING INCOME (NOI)
00:46:54 – Common Mistakes: 1. Expense Capital Expenditures
00:47:17 – Mistake 2. “Below The Line” Expenditures
00:48:02 – Mistake 3: Leasing Commissions
00:48:36 – 4. Reserve Fund
00:51:57 – Pop Quiz
00:57:24 – Figuring Out How Much $ You Can Take Home To Mama.
01:01:36 – When Sellers Double The NOI
01:06:08 – SuperpowersHQ.com/commerciallyspeaking

📒Show Notes📒

🎉SIGN UP FOR THE WEEKLY NEWSLETTER FOR CURATED CONTENT ON COMMERCIAL REAL ESTATE TRENDS, THRIVING IN BUSINESS AND MORE: https://subscribe.wgbarron.com/

Subscribe and listen to Commercially Speaking Here:

Youtube:  @commerciallyspeaking 

Spotify: https://podcasters.spotify.com/pod/show/commerciallyspeaking

Apple: https://podcasts.apple.com/us/podcast/commercially-speaking/id1680750330

Amazon Music: https://music.amazon.com/podcasts/ad036303-414c-4e30-9e89-768d30ed3ffb/commercially-speaking

—-

📲 Connect with us:

Youtube: https://www.youtube.com/@commerciallyspeaking 

Instagram: https://www.instagram.com/commerciallyspeaking/

Facebook: https://www.facebook.com/commerciallyspeaking

Tiktok: https://www.tiktok.com/@commerciallyspeaking 

Newsletter: https://subscribe.wgbarron.com/

—-

Bo is a CCIM Instructor and the owner and operator of Barron Commercial Group, servicing Western KY and its surrounding markets.

For all CRE inquiries, visit http://www.barroncommercial.com

Timmy is an actor, comedian, writer and host: @timmybarron https://youtu.be/ICoIAHSZvgA