First investment loan advice?

2 Replies

Hey all, 

So I have a single family and a duplex, all bought under an owner occupied loan. I found a property in California. It's a duplex with a rent roll of $1,480 a month (one at $830 the other at $650 both 2br/1ba). They are asking 143k.

My income is high, but a third of it is untaxed per diem. It's written in to my contract, and while it can fluctuate, it will never drop below a third. Received for years and will continue to. With per diem my DTI is around 36%, without it 45%. My other problem reserves. I have the 25% down, but not the 6 months reserve for every property. What kind of funding options should I be looking in to? IS there something that wont require the reserves? Or perhaps something that will allow the rent roll to dictate some equity in the loan and not require the full 25% cash from me? Any help is greatly appreciated.

Thanks

You could approach a commercial/asset based lender and they may give you a loan based more on the ability of the property to produce income versus your DTI. However they are still most likely going to want to see about 6 months of PITI.

@Gerald Bruno

Do you have retirement accounts? They are valued at 60% for reserves. Since you only have 3 properties, your SFR only needs 2 months reserves, but you don't want to cut yourself to close with closing costs as well. For investment financing, you can ask the seller to pay up to 2% towards closing costs which will save you some money as well. Here is some info on cash reserves......

http://www.biggerpockets.com/blogs/5110/blog_posts...

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