All Forum Posts by: Madeline Malinovsky

Are you hoping to live in this as a primary? An FHA 203k can be a great rehab option. Most mortgage lenders are able to do these. I'd reach out to a local bank/lender.

Hi Bridgett - that is odd. I've seen different DSCR investors with different "no doc" requirements, so I would recommend getting another opinion from another bank. If this is true DSCR, it should focus entirely on the debt-service-coverage ratio of the subject property.

 Hi Greg - I can help out a bit here:

1) Rental income is calculated from tax returns unless there is a good reason to use the lease agreement. Ex: It was not on last years tax returns bc the property was just purchase and rented out or you just moved out and rented it out (and can prove this). The reason has to make sense. 

2) A conventional loan will look at the past years of income reporting on tax returns. They start with NET income from the business and then there are some addbacks. Some special investors/loan programs can accept YTD earnings with an audited P&L + Balance Sheet, however this is not as common (and often very expensive on your side to do).

3) Addbacks generally consist of depreciation, depletion, amortization & casualty losses, business use of home, mileage, and a couple others. I would recommend talking to a local lender and having them run numbers for you, and this varies based on the type of business. 

4) If the property is under the business, all expenses and income should be accounted for on the business tax returns.  Nothing additional should be required as the overall income (or loss) of the business is accounted for. 

5) If you are personally liable for commercial debt, then it will be factored into your debt-to-income ratio. But if it is in the name of a business, then it really depends if you have ownership in that business. If you do, then the tax returns are collected, and your portion of the total earnings/losses are factored into the ratio. 

3) If you are using business funds for the purchase, then they will request the business bank statements. They can question any large deposits just as with personal statements, but in my experience, I've seen underwriters be a bit more flexible with business accounts

Hope this helps!

Are the commercial portfolio names in your name? Or a business name? If it's a business, you're just fine and will not hit the agency limit.

I would recommend talking to local bank and credit unions.

 Hi Brian - Assuming 760+ credit I’m seeing 6.5% at the cost of 2 points still. I’ll PM you if you want more details. 

Just for reference: $700k with 25% down, I'm seeing 5.32% at the cost of 2 points. $700k with 10% down, I'm seeing 6.5% at the cost of 2 points. PM me if you'd like more info

 This does seem a little steep, but depends on a few factors. What's the target purchase price and down payment? 

 Yes, if they have a stake in the purchase, then they can provide funds. This would then avoid having to add a lien to the property, so your financing options will be much easier. 

DM sent as well. We'd love to help out!