Not being able to count rents as income is killing me

[Ken Virzi]

My tax guy is good, so he shows my rentals as taking losses with depreciation etc and as a result when I go to get more loans, I cannot count my rental income.  Since banks will look at my mortgages but cannot count any rental income, my debt to income ratio is not accurate and my income is much lower as well according to their evaluation. 

Is anyone else struggling with this problem? Are there any workarounds? Is it always a choice between tax benefits and loan approvals?

[Chris Mason]

Originally posted by @Chris Mason:

Originally posted by @Ken Virzi:

It seems all lenders tell me the same thing. That if the rents were on my taxes than we have to go with those numbers. On my taxes the properties are written down so much that it shows no income from the rentals. Those new rentals not on taxes yet can be counted at 75%. Are these not accurate?

 It's not the full story.

If it's a truly cashflow positive traditional rental, and there is no tax fraud occurring, they will be cashflow positive per Fannie too, barring overlays. 

There might be tax fraud, you might not be sharing the full story, there might be incompetent lenders, or you might genuinely not qualify because you have a bunch of cashflow negative real estate. There isn't a 5th possibility...

 Actually I take that back. The 5th possibility is CPA incompetence. On my top 3 CPA pet peeves is "Fair Rental Days." The taxpayer/investor/person purchased the property on November 1, 2018. How could it possibly be that they rented it out for 365 days of 2018, when they purchased it with only 2 months left in the year? Why isn't "Fair Rental Days" 60 or less? You just told the IRS, as well as the mortgage underwriter, that a full year of rent is $4000! 

$4000 / 12 = $333 per month in rent...

Speculation, but that's possibility #5. There is no 6th that comes to mind at present. We see it all the time in California, CPA software must auto-populate 365...