Options for financing when DTI is high

[Katie Panzica]

Hi all! I'm just looking to get into REI and am unsure about what financing route I can take. I currently live in Southern California and our family primary residence, not surprisingly, puts us at a pretty high DTI ratio. I do have $100k + invested in the stock market that could be liquidated if need be, a healthy 401k that I could potentially borrow against and our primary residence has about $100k in equity we could potentially leverage for a HELOC.

Since my husband and I both work full time we were thinking that a turnkey property sounded appealing to generate cash flow vs doing a flip or BRRRR but realize that those are typically LTR investments and we wouldn't be getting our money back out quickly.

Looking for any tips or advice as to options or strategy we should take for our first deal. 

[Ben Stoodley]

@Katie Panzica yes exactly as @Michael Glist outlined above! The higher the better. Keep in mind that the biggest factor in the denominator is the mortgage payment (principal and interest) so that’s why high prices homes like in SD don’t typically fit as well. I’ve seen this work best for SFRs valued below $400k and 2-4 units valued below $800k, in general, assuming a good rental market.