Purchasing rentals without impacting personal borrowing power

[Linda Brent]

I am a new investor interested in financing a few rental houses over the next couple of years. My husband and I have an LLC for this. My problem is that we have complicated personal real estate maneuvers to make over the next 2 years that will max out our personal borrowing power. Ultimately, our plans will result in a massive reduction in our monthly expenses and much greater borrowing power. So the long term impact is great and can help us invest in real estate easier in the future. But I am keen to get started in real estate and wanted to know if there are options to buy rentals that won't mess up our credit or borrowing power. I have been reading the forum and it seems to me that most funding mechanisms either show up on your personal credit or must be disclosed on a mortgage application. What about asset-based loans in your LLC's name? Private loans? Any ideas would be very helpful. We have some options to obtain downpayment funds- but need advice on long-term loans.

[Chris Mason]

@Andrew Nevins @Linda Brent -

The mixed info is because of a combination of some lenders offering Freddie, or Fannie, but not both, and lender-specific overlays. 

• A lender only doing cookie cutter deals for people buying white picket fences really only needs to offer one (Freddie or Fannie), and overlays generally don't matter. Underwriters that only know how to do one thing/product, over and over and over again, are cheaper, so this is a profit maximizing strategy for lenders.
• You REI types need to find lenders with minimal overlays that offer the full gamut of standard mortgage products that is also local to you.
• You do NOT need tax returns showing landlord experience, unless the lender is Freddie only. 
• Fannie will roll with a cheezy 20 minute online landlord course/test that some firms (at least mine) cover the cost of offering.
• Fannie will just go "oh, it was too recent to show on two years of tax returns? OK, let's use what does appear on tax returns or [ rent * 75% - PITI ]."
• If you've had it long enough that it should appear in tax returns, however, but you didn't report it and pay taxes on it, that's An Issue.
• Usually Fannie is more conservative than Freddie. This is one of those cases where Freddie is more conservative.