Debt-to-Income Issue holding me back

3 Replies

Hi BP

I'm hoping someone might have some good advise they could offer if in my position. I'm very new to the investment world and acquired my first rental property the beginning of this year. It was an outstanding deal that cash-flows around $500/month w/ only $18k down. I now have the cash to purchase a second property but am running into a wall. Between my primary residence and my rental along w/ a very cheap car loan (under $200/m) my debt-to-income has reached its max which is the 43% from lenders. Well, if I purchased another property I would be at like 55% so I wouldn't qualify for the loan. My issue here isn't money its lending qualification. The next house I get will be under $100k so I can't go through B2R or a lender that doesn't consider your debt because they seem to all have limits of $100k or more per property. I could pay off my car but then there goes my cash. I can't sell my car and can't sell the my primary residence. As I am 1 1/2 years away from having my current rental income counted towards my "income" by lenders I am kind of backed into a corner. Does anyone know if there are lenders that would consider lending on 1 years tax return with a signed lease for the following year? My thinking is that If I can't get another property within the 1 1/2 years, by the time I have filed 2 years of tax returns I could probably buy 2 or 3 properties at that time. Any thoughts on my situation?

Thanks,

Jake

Portfolio/commercial loan. They will look more at the asset and its income more (not necessarily exclusively) than you personal income.

You'll sacrifice the 30 year fixed interest though.