How does DTI factor into purchasing an investment property

[Shaun Callais]

I recently sold my primary residence and have a fairly large cash reserve. I am about to buy a home in Charlotte and my DTI will increase from 5.4% to nearly 45%. The total monthly payment is about $1,750/month if I put 10% down. I will have around 10% equity in the property at closing. I have an MBA, but have been working a job that pays about half of what most people with my education and experience currently earn. I'm hoping to substantially increase my income after I find a good job in Charlotte (I have years of experience in banking).

The main reason for selling my home and moving to Charlotte was so I can have cash to begin investing in rental properties. I would also like to raise my children in a city that has is more diverse and provides more opportunity than I could find in Utah. I determined that Charlotte would be a good city to start investing. After putting 10% down on a new PR, I will still have six figures to invest. However, I'm afraid that even if I put down 25-30% on a rental property lenders won't give me money due to my high DTI. Is there any way to make this work with high DTI? For example, would I still have a chance at purchasing a tenant-occupied property as long as they've signed a contract? Would I need to look for hard money lenders? Is anyone familiar with how this would work in the Charlotte market? How long after purchasing a rental until I can begin putting 75% of the rent toward income for lending purposes? Sorry for so many questions. I just don't want to shoot myself in the foot.

[David Acosta]

Hey, @Shaun Callais - congrats on the upcoming purchase in Charlotte.  A fantastic market with a lot of economic drivers going for it.  As @David M. mentioned above, executed leases will go a long way. Outside of residential lending, I would encourage you to seek out commercial products from local lending institutions. Your terms may be a little tighter here, but your lending will be based on the asset rather than your DTI ratio. Build these relationships, get them comfortable with you and your business plan, and then execute. Once you've proven the concept it will be an easier bridge to gap the second go around. All the best with the move!