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Updated about 1 month ago on . Most recent reply

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Paul Scammacca
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Am I stuck now DTI??

Paul Scammacca
Posted

Morning all

I have managed to purchase 6 rentals over the last 5 years will 5 of those properties still holding notes. It seems we are up against DTI for our personal income as a measuring stick to purchase another property. We have equity in 4 of the 6 properties ( really 5 one Mobile Home on 2 acres paid for no one will lend ). The equity is low on each about 40-50K on each of the 3. My thought was to refi one of them and use those funds as a downpayment for a townhome (daughter going to university) and rent a room and my daughter live in the other. Problem is I dont think I can get funding now. Is there any way I can move here? Our income w2/1099 is low about 140k a year household so thats the measuring stick. From all properties we are averaging about $375 per door per month. Thoughts??

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Jay Hurst
  • Lender
  • Dallas, TX
1,106
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1,626
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Jay Hurst
  • Lender
  • Dallas, TX
Replied
Quote from @Paul Scammacca:

Morning all

I have managed to purchase 6 rentals over the last 5 years will 5 of those properties still holding notes. It seems we are up against DTI for our personal income as a measuring stick to purchase another property. We have equity in 4 of the 6 properties ( really 5 one Mobile Home on 2 acres paid for no one will lend ). The equity is low on each about 40-50K on each of the 3. My thought was to refi one of them and use those funds as a downpayment for a townhome (daughter going to university) and rent a room and my daughter live in the other. Problem is I dont think I can get funding now. Is there any way I can move here? Our income w2/1099 is low about 140k a year household so thats the measuring stick. From all properties we are averaging about $375 per door per month. Thoughts??

 @Paul Scammacca do NOT just assume you cannot qualify! Talk to someone who understands how to calculate rental income. If your properties are cash flowing they should HELP your DTI, not lower it. This is a very common misconception and many borrowers just assume they cannot qualify. That can be a costly mistake.

IF you speak with a LO that understand rental income and you cannot qualify for a conventional loan, THEN and only then, you can pivot to a DSCR loan. But, make sure you speak with a lender with a NMLS number. If they do not, then the only option that they would have is a DSCR loan. So when you are a hammer, everything looks like a nail. A competent LO with a NMLS number can help you with both a conventional or a DSCR loan if needed.

  • Jay Hurst
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Hurst Real Estate, INC
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