Creative financing a new fourplex

[Tyler D.]

I'm looking to buy a Fourplex, but potentially running into issues on getting a loan, and would like your advice.

The majority of my income is non taxable, and the banks I have talked to have said that they will not loan on it. I have a small portion of my income that can be used, but it will not cover the loan.

I have a significant amount of holdings, worth about 1/2 of the loan amount. 1/2 of those holdings (1/4 of the loan amount) is in cash reserves.

I've also heard that banks can use 75% of projected rents to pay the loan. The banks I have talked to about this however were quite picky and said they would only do it with already established leases, which wouldn't be likely for a new purchase. If I could do this on projected rents, I could get the loan easily.

Another option would be to get a cosigner, but I would want to eventually remove them as I would like the property to be completely my own responsibility.

Any advice on banks to talk to/ methods to use to finance this fourplex?

[Barry Ruby]

@Tyler D'Alessandro DSCR is the spread a lender looks at in terms of the debt service payment on its loan compared to net operating income (net before debt).

For instance: a $130,000 NOI against an annual loan payment of $100,000 = a 1.3 DSCR

This means the borrower has $1.30 for each $1.00 the lender is owed in annual debt service which gives the lender a 30% spread as a cushion.