Help I’m stuck!!!! On just my second rental property investment.

15 Replies

Most lenders (even hard money) have a minimum loan amount they will lend on simply because it is just not profitable for them at such low numbers. Having said that it is not impossible but you will have to look hard for it. I read BOA will go as low as 25k in some situations.

@Rashid Bailey I agree with @Caleb Heimsoth at 50% DTI you need to pay down your debt. At a 32k purchase price these are probably a higher risk property or a deal that would require some rehab dollars.

Either way, it sounds like you are putting yourself into deeper debt. What would your DTI be if you we're to find a lender??

You can’t work your way to wealth and working 12 hour days isn’t exactly enjoying life. I know everyone is excited about getting started investing in RE but putting yourself into a deeper hole to acquire some potential cash flow on properties of this level isn’t what is going to get you there.

This isn’t what you want to hear and may sound Ramsey’ish, but I would say sell the properties you have, payoff your debt and start saving to buy these 32k properties for cash.

Originally posted by @Rashid Bailey :

@Joseph Pietrzak i know it’s tuff for that amount. BOA is on my list of MANY lenders to call. And BOA is probably going to require 2yr on the same job. That’s another challenge of mine. Lol

If you're at 50% DTI on a 32k home you've got other problems man either payoff debt or get more income. The payment on 32,000 house at 75% LTV is like 120 a month + maybe 150 for tax and insurance so thats 270 a month probably for PITI. On a non owner property you can use rental income to offset your monthly payment or PITI (prin/int/taxes/ins) so if rents were 750 for this house you could use 75% or 562.50 per month - 270 PITI = 292.50 positive cash flow.... you actually dont need any income to qualify for an investment scenario based on this.

Originally posted by @Rashid Bailey :

I need a investment lender home price 32k I have 20% BUT my DTI is like 50%. Any help is appreciated. Thanks

 Find a small local bank or credit union that keeps loans in house. Build a relationship and you will never have to search for leaders again. I done this 30 years ago and have closed 45 loans. 

@Ted Klein it’s my Moms place she been there since 2001 and wants to move but she has two properties in her name already. This one and my first primary which is now my 1st rental. I purchased a primary in my name last April think I went to big on price of primary cause I switch jobs too from commission to hourly. So the 12’s is my means of paying down my debt. Thanks for the comment. And the neighborhood isn’t that bad I’ve been here 38yr and know it’s potential.

@Rashid Bailey You will still need to work on lowering your DTI regardless of whether it's your moms house or not, banks won't care about that. As @Clifford Paul had mentioned try small credit unions, they keep their loans in-house so they can carry their own underwriting criteria. The big box banks BOA etc.. will have stricter qualification criteria’s and most would require a DTI below 38-42 and two years of seasoning to claim the rental income. @Chris Mason could explain how the lenders apply their own overlays and what challenges you will be facing. 

@Ted Klein you are right. And thanks for all the information everyone. I will continue getting my DTI and shopping for lending. 2031 is the maturity date on my moms house so I may opt for getting DTI in tact and just co-signing with her for a new place. Instead of buying and get a fresh 30yr loan even though the payment will be super low.