FIRST PURCHASE DILEMA

[Jason Malabute]

I have kind of a unique problem as I am trying to purchase my first rental property.

I am 28 and looking to purchase my first property. I am interested in getting an owner occupied duplex. My research so far has made me interested in areas like Culver City and Hollywood because of the high rent and demand of the market. My situation is unique because I am the opposite of most investors. I can put a big down payment ($200k) and good credit. However, my agent told me that I will have a hard time getting approved for the loan because my salary is too low (net pay is $2000 a month lets say). My agent told me since I am looking for a property that is $800k in value I would have to make $8000 monthly net salary to get approved for the loan. Even for a $600k loan I'd have to have a $6000 monthly net salary to get approved.

The thing is I want to make my investment this quarter while interest rates are low, and AS MUCH AS POSSIBLE I'D LIKE TO AVOID CONSIGNORS.

1. Is there any way around this?

2. Have any of you ever been in my shoes and succeeded? How?

3. If I would like to look for duplexes in the $400-500k price range in Los Angeles (has to be in a good market) where would ya'll suggest?

Thanks!

[Sam M.]

Jason, have you gotten pre-approved by a lender yet? That's the first thing you should do before taking loan advice from your real estate agent. If you are a salaried employee, lenders will qualify you based on your GROSS monthly income. You need to have your credit run so they can incorporate your full monthly liabilities into your debt-to-income ratio. The pre-approval is free and there's no obligation to commit to a lender once it's been done. Let me know if you have any other questions. I am a former mortgage banker/broker