Maxed out debt to income: now what?
Hi all. I had aspirations to be a bit more present on the forums now that my summer has opened up, but haven't been very good with the follow through of late. As it happens I came up with a question that may be a good one to bring to the forums. Two birds, one stone!
I purchased my first property last December: FHA with a downpayment assistance program that got me into a 3/2 with zero down. More or less just happy to be in the game and given a chance to learn as I built up some equity, but explicitly wanting to buy another property as soon as economically feasible. I'm still very much a n00b and didn't really know what that entailed.
My banker recently reminded me that I am currently maxed out on my debt-to-income and can't buy another bank-financed property for a while. To my best understanding I have to show rental income for 2 tax seasons before I can show the projected rent as income for the purpose of qualifying for more debt. I work a job that pays very little and have good credit, but simply have no room to incur more debt for the rest of the tax year.
While my job may not pay very well, it is very lax in the summer months and I hoped to find a real estate-related summer project. I already know I can continue to be a presence in my local REIA, practice running numbers and learning the market (whatever that means; still haven't gotten a fantastic definition of that) and save capital, but I was wondering what the collective intelligence thinks I should do with the next 6-12 months.
- Should I try and find a creative way into the market, like seller carry or a partnership? I have only done the one deal and it hasn't technically cash-flowed yet (I have one roommate and have been looking for a second, but finding a roommate is harder than finding a tenant). Should I walk around speaking as if I really know how to invest someone else's money?
- Should I accept that real estate is slow and spend the year learning? If so, I'd appreciate some guidance on how to learn about a market without an immediate ability to invest in it.
- Is there another way around the debt to income ratio? Is my banker just not working hard enough?
What would you do if you had a low-paying job, little capital but a bit of extra time for some side hustling? I'm in it for the long haul (years/decades, until such time as I legitimately no longer want more money) and don't mind grinding a bit. Just looking for a direction in which to go.