Lender question- Landlord, 820 Credit Score, denied on small loans

[Thomas M.]

Here's a question for anyone who works in lending (and a cautionary tale for those just getting into RE.

I own 4 properties, all 4 of them are on my credit report. All 4 are rented out and cash flow positive.

I have applied for a few small loans over the years (solar loan, car loan, etc) and my application gets denied INSTANTLY because of how many properties I own and how it affects DTI ratio.

My credit score is over 820, my income is very high.

Total mortgage on the 4 properties is around 25K per month. The lenders simply look at that and assume I'm on the hook for 25K a month for 4 houses and I live in all the houses and have no renters. They say "you have 25K in mortages every month, your income doesn't support that so the loan is denied."

I've tried to tell them I have renters and all the properties are cash flow positive. They will hear NONE OF THAT! They just say "DENIED, thank you goodbye." The banks have never heard of such a thing as renting out buildings.

Does this happen to all landlords??? Am I the only person in the world renting out a few 4plexes profitably?

I had one bank that asked for my taxes, I gave them the taxes and it was way too confusing for them they just denied it right away.

[Robin Simon]

Quote from @Thomas M.:

Here's a question for anyone who works in lending (and a cautionary tale for those just getting into RE.

I own 4 properties, all 4 of them are on my credit report. All 4 are rented out and cash flow positive.

I have applied for a few small loans over the years (solar loan, car loan, etc) and my application gets denied INSTANTLY because of how many properties I own and how it affects DTI ratio.

My credit score is over 820, my income is very high.

Total mortgage on the 4 properties is around 25K per month. The lenders simply look at that and assume I'm on the hook for 25K a month for 4 houses and I live in all the houses and have no renters. They say "you have 25K in mortages every month, your income doesn't support that so the loan is denied."

I've tried to tell them I have renters and all the properties are cash flow positive. They will hear NONE OF THAT! They just say "DENIED, thank you goodbye." The banks have never heard of such a thing as renting out buildings.

Does this happen to all landlords??? Am I the only person in the world renting out a few 4plexes profitably?

I had one bank that asked for my taxes, I gave them the taxes and it was way too confusing for them they just denied it right away.

You seem like a picture perfect example of someone who DSCR Loans are designed for. I like to say that the best investor for DSCR Loans is someone between 5-50 properties, where 1-4 you still qualify for conventional and should take advantage of those rates, where 50+ you become more institutional.

DSCR is great for when you are ready to do 5+ because a lot of people are in your same boat - once they hit this number the DTI doesn't work and qualifying for conventional becomes hard and a huge hassle - where DSCR becomes a much better option because of no DTI calc required, no tax returns and the qualification is simply on the new property and doesn't take into account your other four properties as a negative (its a positive actually for a DSCR Lender!)