Buying personal property mid BRRRR

[Ian Thornton]

I have a question i am struggling to get answers for. 

I currently own 2 rental houses and my wife owns our personal residence in her name. My latest purchase was funded through a family member where they loaned us the money to purchase the house in cash (in my name) and i payed for the renovations and currently rent it out with the goal of doing a cash out refi early next year. 

Meanwhile, our dream house has come up and we qualify to buy it, but I'm worried it will mess up my DTI to be able to cash out of my BRRRR deal.

So my question is do brrrr cash out refi's all deal with DTI or are there some more creative options that follow a different formula (I've read a little about some commercial lenders just making sure 75% of your rent will cover the mortgage?) I have steady W2 income, but with adding more rentals i think i need to find a way around DTI to continue scaling.

Any thoughts? My wife and i really want to put an offer on this new house, but i want to make sure I’m not biting off more than i can chew, and be 100% positive i can cash out of my other brrrr deal to be able to pay back my gracious family lender with interest (as planned).

[Ian Thornton]

@Jody Sperling Do you have any thoughts on the questions posed? This really isn't about the "dream house" or being 100% sure. The real question is about financing once you max out your DTI. I want to grow our portfolio at this stage by purchasing a personal property (with 3%-5% down instead of 20%), but I definitely don't want to jeopardize being able to refinance a property that I directly owe a $155,000 short term loan payment on this spring (original loan amount + interest). The Brrrr went great and we added more than enough value to cash out $190,000 to pay both the lender and our expenses back in full, and right now I technically own that house in cash which is helpful for my DTI to purchase a personal property. If there is a way to grow now and still be able to refinance through a commercial loan (That deals with a Rent to Mortgage Payment ratio instead of a debt to income ratio) I would love to know more about it! If it's not an option I will just wait to be safe with the investment I've already made. In our area any house purchase at this point will put our portfolio at over a million dollars of real estate, and I foresee this wall with my DTI is coming at the 4th house mark for us regardless (whether it's now with this house, or even if I wait to refinance and look for a 4th house after), so I am looking for creative solutions from people who have crossed this barrier successfully.