Financing question …dti after next purchase

4 Replies

I'm approved for my next rental purchase (second investment prop). How can I get approved for my third property if the banks typically require that I have a leased property for two years on my taxes to offset the loan amount for my DTI? If they won't count the income from the second rental, this won't offset my PITI on that property. Am I missing something? How do you guys scale quickly with this conventional loan caveat ? Thanks !

Hey Nick, I ran into the same thing after buying my house hack. Funny enough, I am making more money than I ever had but I am barely lendable due to Credit Score impacted by purchases & my high DTI.

How I continued to grow: 
1. Partnership

2. Commercial Financing

Of course if you find a seller financing deal, that is a great way to keep growing. Once my DTI get back into shape, I will buy more with conventional financing.

Hey Nick,  Most lenders have programs that allow you to provide an active lease and two months of canceled rent checks (or proof of auto deposit in your bank account), even if your property is new and has yet to be filed in your taxes. Then, 75% of that is counted as income.  

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@Nick Loukas To add, a number of private portfolio lenders do not report to credit.  This would fall in the category of commercial financing that Sean mentioned.  There are plenty of competitive financing sources through non-conventional lenders that focus on investment property loans.