Rental income consideration for traditional finance

[James Pegues]

I still have a few things to square up before I start looking for properties but recently learned that traditional lenders will only consider rental income after 2 years of being a land lord. I was at a real estate meetup and met this guy who explained a reg D 506b (I think it's the same as a syndication??). He mentioned if I invested with them then I would get a residual as well as tax benefits according to the capital I put in. Their plan was 5 or so years so the money would be invested for at least the 2 years. My question is if my capital is tied up in that investment, will that count for the 2 years of "being a land lord" and the distributions I would get count toward my qualifying income?

[Zachary Cummings]

Hey James!

I am a mortgage consultant for Wells Fargo. You are correct on the using the income after 2 years, however, if you have a lease agreement and or it is on the tax returns (hence at least a few months or a year of income) you can still use the income to offset the PITI payment just nothing above and beyond this. This will still help with your DTI.

I have no knowledge on the 2nd part of the post LOL just wanted to confirm this for you!