First time tri-/quadplex investor and banks' treatment of rents as income

4 Replies

So I am trying to get prequal'd for an owner occupied tri or quadplex here in SoCal. It will likely be FHA. I was told the other day by a lending rep of a certain nationwide bank that because I'm just starting out as a landlord, the bank won't count the income of the other units towards my numbers. Is this true??? Or typical???

This seems like a show stopper to me...

I remember having this issue a while back when I was looking at buying a home. The bank I spoke with said they wanted iirc a 2 year track record. It sounds like this bank maybe the same way. Have you checked with any other banks that you may have a track record with? I am curious to hear any responses that others have. How long a record renting does the bank require?

@Ryan Keough  is correct. Most banks want two years of financial records in order to proceed. For the purposes of residential real estate the income the property you're attempting to purchase generates will not help you. This is only true in commercial real estate, typically property with 5 or more units.

HOWEVER, once you have other properties in your portfolio for a few years their impact on your financials will help you make further acquisitions. Think of it this way, "Real estate is like climbing a ladder, watch your step the first one is a doozy." 

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