Updated about 5 years ago on . Most recent reply

Possible to purchase 10-unit apartment bldg. using future income?
Right now, I have a property in Baltimore that has been generating income since September 2019. Once I have 2 years of experience as a landlord in September 2021, would I be able to qualify for something like a 10-unit apartment building that costs $1.5 million using the future income? I plan to use FHA for this kind of purchase too.
Currently, my income to debt ratio is about $3,500 to $1,100 (I split the $1,100 mortgage 50/50 with fiance and have no other expenses). Let's say the 10-unit apartment building is fully leased at $15,000 per month. At 75%, would I be able to add future $11,250 / month income to my current income to debt ratio to help me qualify for the apartment building? Is this possible?
If it helps, my primary residence, where the $1,100 / month mortgage comes from, is valued at $310k and I have $150k equity in the property. I am willing to rent it out at $2,500 / month and move into the apartment building for one year to meet the FHA requirements. I am also willing to refinance or HELOC the $150k equity if it will help with the $70k cash I have saved so far.
Thank you so much for your time in reading my question. Stay safe and happy investing!
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- Loan Officer / Processor / Life & Health Agent
- Rancho Cucamonga, CA
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A commercial loan from an income standpoint is based mainly on the rents. So you want to make sure that it's as close to 100% occupied as possible. This will hopefully increase your DSR which will help you qualify easier.
Experience is important as well and even more so with the amount of properties owned and flipped or held.
Do your research before you make this huge jump to commercial. It's a completely different animal!
I hope this helps and have a good one.