What kinds of loans Are out there for a fix and rent sfh

[Jennylynn Caldona]

I have 3 homes I rent out and my debt to income is too high. I have a 4bed 3bath under contract in seattle wa 98118, 1400sqft home. I'm buying it for 375k, arv is $500-600k... Does anyone have any suggestions?

[Nghi Le]

Originally posted by @Jennylynn Caldona:

I have 3 homes I rent out and my debt to income is too high. I have a 4bed 3bath under contract in seattle wa 98118, 1400sqft home. I'm buying it for 375k, arv is $500-600k... Does anyone have any suggestions?

Sounds like a BRRRR. Hard money loans are good for the upfront financing of the purchase and rehab, but it sounds like you might have a problem with the back-end refinance if you have DTI issues. I definitely don't recommend putting yourself into a hard money loan unless you know for sure that you can get out of it.

An investor-savvy conventional lender without much overlays might be able to get the loan done.  Albert Bui and Adrian Chu are a couple of active BP folks here who may be able to help.

If not, you can try to seeing if a commercial/portfolio loan will work. It's not based on DTI, but on the property's cashflow/DSCR, which may or may not be a good thing. Properties in King County don't cashflow too well, which may lower the loan amount and LTV. You'd need at least the 1% rule in order to get a good LTV (70-80%), otherwise you're stuck at 50-60% LTV. Rates are comparable to conventional loans on a commercial loan, but it's a 5-yr or 10-yr term instead of 30-yrs.