I have a full-time job and my initial reason for acquiring a multi-unit property was in order to live for free aka house hack and, more importantly, to write off the expenses (renos, mortgage, etc) in order to get more taxes back at the end of the year.
When "pitching" a portfolio lender, does it hurt you if you have been breaking even or reporting a loss for the above stated purposes?
In other words, would they ignore the fact that you are breaking even/reporting a loss because you are "sheltering" your income for tax purposes?
Any input would be greatly appreciated!
It's all about income for any lender, portfolio or otherwise. So just make sure you're dealing with a banker or experienced portfolio broker who understands investor tax returns. You should be able to get back much of the deductions you take on investment property (i.e. depreciation, taxes, insurance, etc). So break even is best, positive cash flow is better.
So have your tax returns analyzed for a clearer picture of what you can qualify for. You should be able to take usual and customary deductions to reduce your tax exposure and still use much of the income you receive for a loan.
For a conventional lender, you don't have to pitch anything. You just have to show proof of paying the loan. You need to meet the DTI's and reserve requirements, by showing your income and assets.
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