Can't get approved due to current mortgage =( Any Help?

[Michael Oliver]

Hello All.... I have purchased a home a couple years ago that I rented out here and there on AirBNB.  It does really well.  I am looking to purchase something closer to town and turn this property into full time short term rental that would do really well.  My mortgage is 26.5k a month and the projection is 40k net income.  

I have been trying to find lenders but no one will approve me because I wouldn't qualify with 2 mortgages.  

Thoughts?

[Randall Alan]

@Michael Oliver

So I have to start off asking, "Exactly how big is your house to have a $26,500 a month mortgage?"   If you take it being occupied 25 days a month, that is $1,600 a day at almost maximum occupancy.  Impressive if that is what you are pulling off!

One of your bigger issues is the word "projection" in your write up. If you can't exhibit that you are collecting $40,000 a month in income on a consistent basis, no lender is going to count that amount of money towards offsetting your debt to income ratio. A DSCR loan will do that for you... but they usually want to see proof that is what it is earning. While sort of 'taking the long way around the barn' approach... if you are confident that you can full time AirBnB your property and net that on a regular basis... you might consider moving out of your house and renting for a year to demonstrate that you can offset that much a monthly debt. Before you did that I would talk with your local commercial banker at a small to medium size bank (not the Bank of America types... but your regional size bank) and just have a conversation with them. Ask them, "What do you require for proof of income to qualify my property for a DSCR loan?" We have rentals, and our lender wanted 2 years of leases on each property we were working with. On an AirBnB... I don't know what that translates to.

All the best!

Randy