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Updated over 12 years ago on . Most recent reply

User Stats

178
Posts
57
Votes
Dan Costantino
  • Rental Property Investor
  • Pittsburgh, PA
57
Votes |
178
Posts

Will buying a rental hurt my personal borrowing power?

Dan Costantino
  • Rental Property Investor
  • Pittsburgh, PA
Posted

If I buy a property in an LP, but have to personally guarantee, I would assume that would hurt my debt to income ratio, correct? Or does it only hurt me if the cash flow is less than 25% (I heard that from a fellow investor).
$80k Price of Bank Owned Home (Might need $2k in updates)
$16,000 Down
Gross Rent $10,200 ($850/mo)
Monthly PITI $650

House is worth roughly $95,000 on the market.

To me, this doesn't seem like enough cash flow.

Thoughts?

Most Popular Reply

User Stats

674
Posts
182
Votes
Ryan M.
  • West, MI
182
Votes |
674
Posts
Ryan M.
  • West, MI
Replied

On a side note, when people say cash cow I get nervous. Either there is a ton of future maintenance or someone is trying to unload a problem.

If it was in fact a cash cow why would anyone sell?

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