Best way to work on a 2nd property

[Christopher John Walker]

Hello all

So, I'm pretty new to all of this, I currently have one house under my belt. I'm working on planning to get my 2nd property would like to get a multi house. With that being said for this first house it was an issue with debt to income ratio. Would like to hear any suggestions on how I could go about securing another loan if I found a property that worked for me. The big issue I've had is I'm self employed so after my last 2 years of write offs its a tight fit on qualifying. Have heard of debt service loans not for sure how these actually work if someone could give me an idea if I'm heading down the right path, if that type of loan is going to help me secure another loan or not.

Thanks in advance for any help !

[Nathan Gesner]

Quote from @Christopher John Walker:

Hello all

So, I'm pretty new to all of this, I currently have one house under my belt. I'm working on planning to get my 2nd property would like to get a multi house. With that being said for this first house it was an issue with debt to income ratio. Would like to hear any suggestions on how I could go about securing another loan if I found a property that worked for me. The big issue I've had is I'm self employed so after my last 2 years of write offs its a tight fit on qualifying. Have heard of debt service loans not for sure how these actually work if someone could give me an idea if I'm heading down the right path, if that type of loan is going to help me secure another loan or not.

Thanks in advance for any help !

I'm sure someone with a financial background can give you some different ideas, but if your debt-to-income ratio is too high then my suggestion is you work on fixing that before investing more. There are some people that skirt the edge of fiscal responsibility (or even cross the lines) and make it out the other side, but those are exceptions to the rule. For most people, success comes after many years of disciplined, wise investing. Real estate is one of the best investment vehicles known to man but it still involves risk and you still need to make prudent decisions if you want to ensure success.

[Muhammad Amawi]

First thing that came to mind for you was a DSCR loan (debt service cover ratio loan). If you still need help with this DM me and I'll see what all I could do to help. I'm a loan officer native to the Cleveland area.

[Nicholas Misch]

Quote from @Nathan Gesner:

Quote from @Christopher John Walker:

Hello all

So, I'm pretty new to all of this, I currently have one house under my belt. I'm working on planning to get my 2nd property would like to get a multi house. With that being said for this first house it was an issue with debt to income ratio. Would like to hear any suggestions on how I could go about securing another loan if I found a property that worked for me. The big issue I've had is I'm self employed so after my last 2 years of write offs its a tight fit on qualifying. Have heard of debt service loans not for sure how these actually work if someone could give me an idea if I'm heading down the right path, if that type of loan is going to help me secure another loan or not.

Thanks in advance for any help !

I'm sure someone with a financial background can give you some different ideas, but if your debt-to-income ratio is too high then my suggestion is you work on fixing that before investing more. There are some people that skirt the edge of fiscal responsibility (or even cross the lines) and make it out the other side, but those are exceptions to the rule. For most people, success comes after many years of disciplined, wise investing. Real estate is one of the best investment vehicles known to man but it still involves risk and you still need to make prudent decisions if you want to ensure success.

I couldn't disagree more unless the person in really under water financially. I do not qualify anymore for most conventional loans due to my situation, so I am currently in the process of using a DSRC loan on our current BRRRR. Just because my DTI doesn't fit the conventional lending criteria, doesn't mean I don't have the cash reserves to weather several months of difficulties. Also the DSCR loan is based on the expected income on the property VS the expenses, so to me it's a no brainer in my situation and many others who are in "creative" income situations. Christopher John Walker, you have to make the best decision on what your comfortable with based on your unique situation. Consult a reputable lender who can go through different scenarios with you.

[Account Closed]

@Christopher John Walker 

Look into DSCR loans.

1. 1. There is no personal income validation
2. 2. Your Debts or DTI are not considered
3. 3. The lender makes to loan based on the property’s ability to service the Principal, Interest, Taxes, & Insurance.

[Eric Goldman]

are you planning on occupying one unit? you can always go DSCR if non owner occupied. Other options are available if you are going to occupy one unit.