HELP!! Refi on 1st BRRRR & Private Equity on 2nd - DTI TOO HIGH!!

[Chris Grizzaffi]

I am self-employed (I write off a lot), and I purchased my first BRRRR a couple weeks ago. I am in the middle of both renovations and a refi on the hard money I currently have in place.

Another property has fallen in my lap, and I have a private equity partner lined up for this property. However, the lender for my refi (who does a ton of investor loans) says purchasing this home (even with cash) puts my DTI over their threshold and jeopardizes my refi.

I would still like to proceed with this second home, but how should I do so? Do I ask my buddy (private equity) to just buy the home himself, putting the deed in his name while I do the work on it, and then we deed it over once my refinance is done? 

I am in option on this second home, and I am set to close on Monday. What do I do?

[Chris Grizzaffi]

Originally posted by @Tania White:

@Chris Grizzaffi what was the solution?

Tania, my partner in the second one ended up putting the home in his name until I get the other home leased and complete my refi. My lender stated that once the first refi was done and the home leased, they'll be able to continue onto the second. I was very open and transparent with them. 

I had one or two people offering advise that it was risky to allow him to put this second one in his name on the deed. I discussed this candidly with him. I've known him for ages, and he is not interested in the real estate. He is willing to work with me as we learn it all together. he wants it to be a win-win, so once we get this one done, we can just move on to the next.

There are a couple people who mentioned refis without a DTI component, and I am intrigued by that moving forward as well. These are my first two, but this endeavor is something I want to RUN with, and I would love nothing more to focus on following finding great deals rather than worrying about my DTI.