Strategy DTI to high credit score 775/780

[Renee Lee]

I’ve got a strong credit score. And I’ve got a total of six doors. But I can’t seem to qualify for an additional property due to my debt to income ratio. I’ve owned all but one of these properties for more than 15 years.

-Duplex paid off monthly rent $1180.

-Single family home owe $12,000 / monthly rent $1150.

-Single family home owe $12,000 / monthly rent $750, soon to be $950.

- Duplex owe $89,000 / monthly rent $1800

- Primary residence: owe $65,000 (and no rental income here).

Pulled some $15,000 of Equity out of my primary residence as HELOC to rehab the property that rents for $750. After I cleaned it up I believe I can get 950 maybe even $1000 a month rent. I know about the BRRRR method I've thought about using that method with this property, BUT I'm in central FL and there isn't a lot of property for under $100,000. Plus I do t know of a lender who will do a refinance on investment property, in terms of cash out.

I’d love feed back on how to qualify for my next investment. Including maybe a lender that works with people like me.

Your sight, experience & guidance are much appreciated. Thanks for taking the time to help me.



[Marcus Auerbach]

I am making the obvious asumption that you have reported cash flow correctly on your tax returns?

It is very typical that you have to match the lender to the lending needs. We have mortgages with several local banks and despite great relationships with all of them and the fact that most of them have invited more business from us, there is always one that is the best fit. Don't assume all banks are equal and are looking for the same type of deal/borrower all the time.

In particular when it comes to in house products - lenders look at their current loan portfolio and decide what asset class they want more of or not. One of my long term go to lenders decided they had enough single family homes and only wanted to add deals over $1M, so I had to switch.

And you may have to use portfolio loans instead of 30 year fixed products.

If you have not done yet, make a list of 10 smaller local banks and schedule appointments. Bring your package, executive summary on top - I am pretty sure you won't get past the first 5 or so before you find a match. 

The key here is to use LOCAL banks and I don't know where you live and invest - I have a list of great lenders for Milwaukee, but that won't help you if you are in another State.