Just getting started with high DTI

[Katie Weinstein]

Hi all,

I am new to BP and just starting to research how to start becoming a buy and hold investor under extremely limiting circumstances and was hoping the BP community could shed some light on the best financing strategy to use for my first few properties.

Current Financial Situation

A little background on my current situation: I am 28yrs old working in television in NY ( making roughly 55-60k a year- yes it is brutal) I just bought my first primary home 2 years ago in Williamsburg, BK to lock in how much I'm paying for housing year over year in a place where incomes don't increase as fast as rental prices (2 bd for 340k (this is an HDFC which is how I got a home for this price in an area where the median price is 1.5 million) ) so obviously my DTI is extremely high at almost 60% with no other debts besides my primary home (I also have a roommate who pays me $900 a month for her room which helps with about half my total monthly housing costs) (had a great mortgage broker that really helped me wiggle in to my first home)

I now have about 75-80k in equity in the home and access to a family trust with a similar amount of money in it and was looking for the best way to turn buying an initial first property all cash into the ability to buy more properties( out of state of course- looking at different areas in the country from PA to TX to TN to FL). Here were some initial thoughts on those strategies(I understand that the numbers on all of these strategies would have to make sense from a cash flow and Cash on cash perspective):

Strategy Ideas

1.)Use cash from the trust to buy first property than take out a HELOC on the investment property to buy the next one- and so on?

2.)Pay cash for property 1 then refinance property 1 using a commercial loan and use the cash from the refinance to buy property 2 and repeat (essentially using BRRR strategy with commercial loans) Is it possible to find commercial loans without a balloon in 5-7 years? Is it a pipe dream to be able to find a rental where I am still cash flowing $100/ unit and ~10% CoC with commercial loan interest rates at 7-10%?

3.) Take out HELOC on primary home and use that to buy first investment property and essentially BRRR with commercial loans

Is it possible to get a commercial loan on a singular first investment property ( under an LLC of course)?

I’m looking to see how to turn one property into many using equity and creative financing given my limited personal financial situation. Of course I am definitely open to partnerships and willing to put in 100% of the work for 50% or less of the profits in the beginning, but am looking to see what my options were for buy and hold as a singular person first.

I know that was a lot so thank you all for even reading this far!!