I plan to use my VA loan in the next couple of years to purchase a no money down small multifamily for my wife and I. I'm not in a position to use it right now because I live overseas. In the mean time I plan on distance acquiring several buy and hold properties. One concern I have about the VA Loan is that if your debt to income ratio is higher than 40% you do not qualify for the 0% down option and have to provide some other form of collateral. I don't like that. I will most likely be over 40% due to my rentals, is there a way to "shield" your personal debt by holding all of your properties in an S corp or an LLC? Any suggestions for getting around this clause?
Make more money is a good way to get around it. I wouldn't try and get too creative moving liabilities around into different entities.
Your mortgages will be in your personal name, or at least you'll have a personal guarantee on the loans. So putting title in an entity name won't change your debts or DTI.
If your rentals are cash flowing and are "seasoned", meaning they've been cash flowing for more than ~12 months, they shouldn't count against you. The VA rocks!
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