Can I get approved for a rental loan?

[Saul G.]

...with a 2 year old llc (no rental income) and no primary? Just based on these 2 parameters. Also, whats the chronology for turning a primary into a rental?

[Jon Holdman]

You're not going to get 5% down investor loans.  Assume 20%.  Closing costs are more like 2% around here.  So, more like $45K per property.  Cash reserves are also needed.

You need two years of tax returns showing rental income before lenders will start including that in your DTI calculation. So, for those first couple of years your other income will need to be used to qualify for the loans. That is, the debt part counts and the expected income is ignored. Once you have the two years tax returns, lenders will use the actual income (or loss) from your tax return for existing properties. For new properties, they typically take 75% of the expected rent less PITI to estimate expected income or loss from the new property. Income adds to the "I" part of the DTI calculation. A loss adds to the "D" part.