Home Loan for Real Estate Guy

[Joshua Smith]

I own ~9MM of real estate with a partner; but I'm trying to buy my own house, and it's challenging! Any ideas?

-My tax returns look crazy because all my income is offset by massive depreciation. Last year, my taxable income was like 7K.

-I pull in ~9K/month of cash flow, but it's all tax free from the depreciation

-I can harvest ~$1MM of cash at the end of this year after I refi some mobile home parks, but my DTI will be high then

Traditional lenders scoff at my taxable income, as if it's really the income that I make. 

Are there loans that can look beyond the fact that I don't have a W2? Could do a DSCR and pretend it's a rental I'm looking for, but nothing pencils in Denver on that front. I guess I could do like a 50% down DSCR loan and it might pencil DTI-wise.

Any ideas out there?

[Chris Mason]

Any/all depreciation should be "added back," thus a non-issue. You say "lenders," plural, but if you've run your paperwork past more than one loan officer, I'm suspicious that not a single one were aware of adding back depreciation. Are you sure that when you say "lenders," plural, you don't actually mean 0 to 1 loan officer? 

DSCR loans are only for rental properties, no you shouldn't commit fraud.

Your $9k/mo, assuming no consumer debts, would qualify you for about a $3900/mo mortgage payment. I suspect that alone will not get you a house that suits your needs, so you might have to pair that with the $1m you are about to pull from the mobile home parks. The scenario might also be that you just say "f it," do a cash out on whatever commercial loan you next have coming due (since you have to do it anyways), and pay cash.

At the end of the day you would not be the first CRE guy that can't get a residential mortgage, and will not be the last.

Let me know if I can help, I do business nationwide on the commercial mortgage side of things. I'm likely not licensed where you want to buy the home, but if in the process of doing that cash out refinance I put my residential hat on and can figure it out, maybe there's a world where I find/educate the residential MLO to help you with that, idk.