Hello BP community!
I am excited to share that we are currently in escrow for our first property and in hold for the second one but, due to my low income seems challenging to qualify for it. The 1st property is as residential, 20% down, second as an investment property but I can’t qualify by myself due to my low income, I have enough for the second property down payment. Can I bring in a partner for the second one and how the lay out should be? I have a few relatives that are willing to partnership but, I don’t they have any way to show reserves/money for down payment.
Any advised would be greatly appreciate it and, by the way I open for partnerships :)
Congrats on buying your first property! That is a huge deal. As for the second, a partner would likely be the route to go. For this you will need to carefully vet who your partner is. Banks will combine the debt-to-income ratio for both borrowers and choose the lower of the two credit scores. So make sure the partner you choose has a great debt-to-income to help overcome your lower income and a credit score of at least 620 so you guys can qualify.
As for the downpayment and reserves that can also combine both assets too if you don't have enough on your own. Hopefully this helps!
@Ryan Husser thank you very much for your input/expertise I am located in California.Tonight I was told by a lender that, for me to have a partner this partner has to come in with equal money for the down payment and enough reserves for at least six months showing the funds on his/her bank account a couple relatives are willing to help me out but they don’t have the funds for the down payment or reserves for the six months, how can I go about this? Or is it okay for me to transfer some money to their accounts?
Do you have any retirement accounts at all? I believe you can use your retirements accounts such as 401k as reserves.
@Nathalie Tran , I don't have a 401K I have an IRA can use this instead for reserves? Thanks.
Yes, i believe any retirement accounts or stocks would qualify for reserves.
@Roberto Joya Interesting, normally I've never heard that the downpayment reserves need to be 50/50. If getting money from other relatives ask your lender for a gift letter. You and the gifter will need to fill it out, but it is fairly common on the lender side.
And you would be able to use and IRA as reserves, usually if it is in stocks or equities they can only use about 70% or so of the value since it is not liquid cash. Hopefully this helps!
@Ryan Husser thanks for the info, I thought so too. I appreciate it.
@Nathalie Tran Nice, Thank you!