Advice needed - Buying personal home after investment property

Dallas, Texas
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Advice needed - Buying personal home after investment property

Amanda Rose
Member since 2023 · 2 posts · 0 votes

Hi!! My husband and I bought an investment property in 2021 for short term rental in dallas area using host financial (dscr loan). The taxes are really hurting our cash flow bc they have no appreciation cap. Essentially they nearly doubled since purchase. We are thinking of refinancing later this year after paying it down further, claiming homestead (need to move in before Jan 1, 2025) /selling to ourself for original amount to get the tax value down and moving into it. We have been stuck since purchasing it, as my mortgage broker said I don't qualify for a regular mortgage due to the debt to income ratio impact. That said are my hands tied on buying another rental property until I refinance this house into my personal name? Currently our rental property is in an LLC but personally guaranteed by me. Any advice for buying a personal home while building investment portfolio? I found an investment property I really want to buy.. Thanks in advance for any tips!

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  • Jason WrayPro Member
    Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
    2y

    Amanda,

    If your DTI/debt to income is higher than traditional you would simply buy another investment using DSCR. DSCR does not use income it uses the rents to qualify so no W2's or tax returns are needed. As long as you have the 20% to put down you can buy an investment home right away. If your cash flow is tapped on that other home I would walk away and sell it if you can make a profit. You can do a 1031 exchange and avoid any capital gains if you put it back into another property.

    Sounds like you might need to talk to another Banker/Loan Officer!  Reach out if you want...

    [email protected]727-637-4289
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  • Amanda Rose
    OP
    Member since 2023 · 2 posts · 0 votes
    2y

    Thanks for the reply! How do investors qualify for a personal home conventional loans if they have multiple dscr loans ? 

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  • Austin ClarenceBusiness Member
    Lender · Phoenix, AZ · Member since 2023 · 136 posts · 32 votes
    2y
    Quote from @Amanda Rose:

    Hi!! My husband and I bought an investment property in 2021 for short term rental in dallas area using host financial (dscr loan). The taxes are really hurting our cash flow bc they have no appreciation cap. Essentially they nearly doubled since purchase. We are thinking of refinancing later this year after paying it down further, claiming homestead (need to move in before Jan 1, 2025) /selling to ourself for original amount to get the tax value down and moving into it. We have been stuck since purchasing it, as my mortgage broker said I don't qualify for a regular mortgage due to the debt to income ratio impact. That said are my hands tied on buying another rental property until I refinance this house into my personal name? Currently our rental property is in an LLC but personally guaranteed by me. Any advice for buying a personal home while building investment portfolio? I found an investment property I really want to buy.. Thanks in advance for any tips!


     Hi Amanda, you could look at a no ratio loan where personal income is not considered. However, you would still need 20% down + and reserves. 

    A DSCR would work in theory, but they are only meant for rental properties.

    If you or your husband are self employed you could look at a bank statement loan, but if you are W2'd then this would not be an option. Hope this helps, let me know if you have any other questions

    [email protected]650-906-2376
    Austin Clarence with NEXA Mortgage552 Reviews
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