Legal Entities and Personal Debt

3 Replies

Hello All,

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?


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.

Property Management Software
Manage Your Rentals Better For Free. Save Time & Money.
Easily Collect Rent, Screen Tenants, Sign Leases, List Properties, Manage Work Orders, & Much More!
100% Free Try It Now

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you