How to keep going when you hit your DTI (Debt To Income) limit?

[Bradyn Melser]

Hey community. I've been investing for a little while in rentals. I've done a couple methods (including the BRRR). I now have 4 cash flowing rentals and am loving investing, but I have a problem. I hit my DTI with the acquisition of my last 2 properties (I did them in one go). How do I keep acquiring properties and getting them under a mortgage?? No one seems to answer this for me.

Other helpful information:
My income isn't huge, but I've got enough to continue to scale for now. The only debt outstanding I have are these 4 rental properties. 2 I have amazing rates on (3% and 3.5%) and have a decent amount of equity now. 

[Weston O'Dell]

Hey Bradyn, congrats on your success thus far! As mentioned above, the DSCR route is a great next option for you. There are many great lenders out there who you can use to both acquire and refinance as necessary going forward. Underwriting is asset-based from the income perspective. Meaning, that the rents (or market rents) will need to cover the payment +tax/insurance/HOA of the subject property. Vesting generally will need to be in an entity and the new mortgage will not report as a tradeline under your personal credit. Keep in mind, personal credit score does play into the pricing of these DSCR loans so make sure to keep your score solid! There also is no cap on the number of these loans you can obtain.

Your alternative option to institutional DSCR loans would be in-house commercial loans with banks/credit unions. You can expect each bank to have differing appetites for investment properties so make sure you chat with a few. These loans are generally shorter amortizations (15-25) with fixed rates for 3-7 years. I think it is a great approach to look at both DSCR loans as well as bank commercial loans and place each deal with the option that fits your property/situation at that time. Best of luck as you continue to the next level!