Hi All,

Have a question for the forum and looking for some suggestions or insight on our issue. We are eager to start the REI journey and especially looking at using the BRRRR method for our first deal.

I have a W2 job, and still about $85K in student loan debt. My wife is self-employed and we normally make about the same amount yearly. However, her income declined greatly in 2020 due to covid, and using her 2020 and 2019 tax returns our lenders have told us our current DTI is too high for pre-approval (at around 50%). We've tried several different lenders (about 5 in total) but all come back with a version of the same answer. Currently, we are looking at deals in the Midwest at prices not higher than 200k, and our normal income would be more than enough to cover these deals. Indeed, we could purchase some we've seen for cash but our goal is to use as little money as possible of our own and of course to recycle it over an over.

We are faced with a decision, as we have plenty saved for a down payment, along with money for repairs or capital expenditures and holding costs. We could pay off my student loan in full right now, but it would deplete much of what we have saved for investing. We’re trying to figure if paying down the debt is the highest and best use of this money or if there is another option we are overlooking that keeps our money in hand and allows us to move forward with lenders where we can get cash out at the end of our deals.

We’ve already considered a co-signer for our deals but wanted to see what the forums have to say first. However, if the co-signer is the best option, has anyone had experience with compensating their co-signer? Thanks in advance!