DTI & Multiple Investors

[Joshua Davies]

Hi, I am currently looking to purchase 2 rental properties and have 2 investors that are funding the down payments for 2 separate properties. After learning that you can’t get conventional loans for LLC’s we have decided we will keep the properties in my personal name and purchase an umbrella insurance policy. However, I currently do not own a primary residence, which I would like to later this year. My problem is that if I purchase the 2 rental properties and in 6 months I want to purchase my own home my DTI may be too high. The 2 investors are both from the UK so do not have any credit history here in the US but are cash wealthy in the UK. My question for lenders is, are there any ways to include my investors credit and cash on the purchases so that they will consider both of us on the loan? And if the properties are cash flowing and profitable, would this be taken into consideration when I come to purchase my own property? I don’t want to shoot myself in the foot by purchasing rental properties and then not being able to buy my own home. Thank you!

[Chris Seveney]

Joshua Davies
Depending on the lender some will include rent after 6 mos and some may make you wait up to 2 years. If you are buying in your name and taking loans out on them you have to be very careful that CFPB laws are being followed and when you apply for a mortgage you have to state your down payment is borrowed

Remember also if your personal name is on them and the deals go bad your credit will go down the drain and then your years before getting s mortgage

[Upen Patel]

@Joshua Davies I see multiple issues:

1) Your investors are don't have a extensive history in the US, so most likely they don't have a FICO score that can be used for mortgage or it is low (being that it is new).

2) You can't have gift funds/borrowed funds for investment purchase.

[Veronica Frieling]

It sounds like you need to go hard money. You'd be able to form the LLC to ensure a couple of things:

1. Utilize the investment from the UK investors on the rental properties

2. When you are ready to purchase your home, the LLC is looked at as a different entity and will not affect your DTI when the time comes.

If the properties are in CA and you want to talk more in depth, feel free to reach out. I lend all throughout the state.