Loan on personal property

[Adam Lawrence]

I’ve got two goals for the next 12 months. One is to buy a multi family property, 5 or more units. My other goal is to buy a home. I’be got 5 kids and 3 bedrooms so I’ve got to get a bigger house.

My understanding is that the lender won’t count income from rentals for 2 years. How will the commercial loan on my credit affect my debt to income ratio? Will they really count the mortgage (suppose its $11,000 a month) against my income but not credit me any of the rent for two years?

If that’s the case how to you move up in house...especially if you are always doing new deals and the debt goes up.

Thanks

Adam

[Steve Hall]

So Adam, the reason I asked why you want to buy a primary residence and a 5+ unit in the same year is because you have a history of inaction (and your goal is far more ambitious than your previous attempts at investing):

2 years ago you posted: "I live in California and I am looking to buy my first buy and hold multi family. I'm thinking about a duplex or four plex. Prices here are very high. What are your thoughts about buying out of state or in another, less expensive market? I understand I don't know as much about the market, I just don't want to spend $550,000 for a four plex. Especially with rents of about $1,000 a unit."

1 year ago you posted: "I am looking at a property that is 650k. I am purchasing with a partner. Is it a problem having part of my half of the down payment coming from a signature loan from a family member?"

I recommend that you concentrate on providing for your family, and think about real estate investing when you've saved up some money and don't need to rely on family members for the down payment. If you really make $350k a year, it shouldn't take you long to save up some money.

Best of luck...