Tips on how to get to your second investment property

@Daniel Watson,

First off - huge congrats on closing your first deal, especially on an owner-occupied duplex with just 5% down! That’s a solid way to house hack your way into the game, and it’s clear you’ve got the momentum and mindset to keep going. 

You're not alone - many investors with student loans or early-stage mortgages face this exact challenge. The good news is: there are ways around DTI limits, and it doesn't always mean putting your investing on pause.

 A Few Options to Explore:
1. Let the rental income help your DTI - even if it's not "seasoned"
If you’re living in one side of your duplex and renting the other, that rent can often be counted toward your income, depending on your lender and whether you’ve claimed it on your taxes yet. Some lenders will use projected rental income (from an appraiser's rent schedule) even if you haven’t been renting for a full year.

2. Look into DSCR Loans (Debt-Service Coverage Ratio)
These are designed specifically for investors and don’t look at your personal income or DTI - they look at whether the property can pay for itself (i.e., does the rent cover the mortgage and expenses). If you’re buying a turnkey cash-flowing property, DSCR loans can be a great fit, especially for those with higher student debt or irregular income.

3. Buy in lower-cost cash flow markets
You're already thinking turnkey - which is smart, especially if you're trying to scale with limited time or capacity. In Midwest and Southeast markets (think: Indianapolis, Birmingham, Cleveland, Memphis), you can find fully rehabbed, tenant-occupied properties for $100K–$150K, sometimes less. These often come with strong rent-to-price ratios and are a great match for DSCR or portfolio loan options.

4. Partner with someone
If you're open to it, consider bringing in a money partner or co-borrower for your next deal. You might handle the research, market selection, and operations, while they bring capital or stronger income/credit. Just be sure to formalize the arrangement!

Should You Wait and Pay Off Loans First?
Only if doing so aligns with your long-term goals and you’re not delaying your investing journey unnecessarily. You’ve already got great momentum. If you’re comfortably managing payments and there’s still room to take on another property using the right financing structure, it may be more powerful to use your capital to acquire income-producing assets instead of sinking it into low-interest debt.

That said, it always comes down to your personal risk tolerance and how much flexibility you want in your finances.

You’ve already done something most people never will - you took action and closed on your first deal. Now it’s about finding smart, scalable ways to keep growing despite the debt. You can do it, especially with tools like DSCR loans, turnkey rentals, and strong property management in the right markets.

Feel free to DM me if you want help comparing loan options or evaluating some turnkey properties — happy to help however I can. 

Best of luck,

Melissa