What would you do?

Milwaukee, Wisconsin
Private Lending & Conventional Mortgage Advice
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What would you do?

Sam Westfall
Investor · Milwaukee, WI · Member since 2023 · 2 posts · 0 votes

Hey BP,

Just acquired my first duplex using a 10% down 7 Year arm loan...

My job is a sales engineering role... I have a guaranteed salary for the first year (which helped me get my first loan), but then it goes to pool plan style commissions after that... (Wondering would you guys recommend a fixed salary position in order to scale quickly or it won't matter)

I love the idea of long term tenants with 1 year leases... What would you (a more experienced investor or lender) recommend I do if I am looking to scale quickly with hopes of buying a 4-12 unit property as soon as possible?

(I can go into more detail in DMs)

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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y

Hey Sam, 

Have you looked into DSCR loans?

Lenders qualify you based on the rental income covering the mortgage payment. No tax returns or DTI required to qualify

[email protected]818-269-7983
LuxePrivate Investments LLC 572 Reviews
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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y

    Hey Sam, 

    Have you looked into DSCR loans?

    Lenders qualify you based on the rental income covering the mortgage payment. No tax returns or DTI required to qualify

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    1Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    3y

    You need to be looking into DSCR loans - they do not take into account personal income or finances

    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
    WebsiteView Page
    1Reply
  • Julien J.
    Investor · CO · Member since 2016 · 757 posts · 1k+ votes
    3y

    I'd echo the DSCR loans.

    Also, keep in mind 5+ unit buildings is considered commercial. Different loans apply which are based on the property for the most part rather then the borrower.

    Could also cross collateralize your duplex with it builds up enough equity in the future.

    A fix salary helps a lot, but cash to put down will also be an issue.  

    1Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Sam Westfall:

    Hey BP,

    Just acquired my first duplex using a 10% down 7 Year arm loan...

    My job is a sales engineering role... I have a guaranteed salary for the first year (which helped me get my first loan), but then it goes to pool plan style commissions after that... (Wondering would you guys recommend a fixed salary position in order to scale quickly or it won't matter)

    I love the idea of long term tenants with 1 year leases... What would you (a more experienced investor or lender) recommend I do if I am looking to scale quickly with hopes of buying a 4-12 unit property as soon as possible?

    (I can go into more detail in DMs)

    Here's my two cents.
    I would exhaust all of my conventional financing first. That means stick with the salary job until you can no longer qualify.  Once you've done that, then go to pool plan commissions (if that's what you want) and use DSCR past that.  
    You won't qualify for conventional financing for 2 years if you go all commission, so stick with the salary until it either doesn't work or doesn't make sense.  It's all math.
    All the best
    Stephanie
    1Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Stephanie P.:
    Quote from @Sam Westfall:

    Hey BP,

    Just acquired my first duplex using a 10% down 7 Year arm loan...

    My job is a sales engineering role... I have a guaranteed salary for the first year (which helped me get my first loan), but then it goes to pool plan style commissions after that... (Wondering would you guys recommend a fixed salary position in order to scale quickly or it won't matter)

    I love the idea of long term tenants with 1 year leases... What would you (a more experienced investor or lender) recommend I do if I am looking to scale quickly with hopes of buying a 4-12 unit property as soon as possible?

    (I can go into more detail in DMs)

    Here's my two cents.
    I would exhaust all of my conventional financing first. That means stick with the salary job until you can no longer qualify.  Once you've done that, then go to pool plan commissions (if that's what you want) and use DSCR past that.  
    You won't qualify for conventional financing for 2 years if you go all commission, so stick with the salary until it either doesn't work or doesn't make sense.  It's all math.
    All the best
    Stephanie

    This is the way to go - max out on conventional and then once you max there, switch to investing through LLCs and DSCR Loans

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    1Reply
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