DTI & Buying an Investment before Primary

[Andrew Broxterman]

I am looking to buy in Cincinnati with a partner in an LLC. A lender who gave us a pre-approval says with my income level, it is not wise to buy an investment property before a primary residence, as the lender on my future primary home will count only half the rental income and the whole investment mortgage in my DTI calculation.

My monthly income is $6,666, and my only current debt is a car payment of $315/month. The investment property would raise my monthly debt to around $1,550 for a DTI of 23%. With a max DTI of 50% for buying a primary, my max monthly payment on the primary would be $1,833, limiting my options. He also says my PMI and interest rate will be higher on my primary if I'm putting 3-5% down like I plan to.

What are your opinions on this? How do people get to 10, 20, even 30 doors working W-2 jobs like I am? Are there just lenders who will ignore your DTI, or only account for half the mortgage if investing with a partner?

A route I can, but don't prefer to take, is to put half down on the investment with a promissory note with my partner (property fully in his name initially), and transfer the property into our LLC after I buy a primary.

I greatly appreciate any help with this.

-Andrew

[Brian Cauldwell]

DSCR loans. The lenders we work with do not care about DTI. Credit score, and cash flow for the rental property are the primary factors.