Julian, CA · Member since 2020 · 24 posts · 7 votes
I'm exploring options to generate enough funds to purchase a $450k investment property but don't have the liquid cash. I have another rental property free and clear and considered securing the funds by taking a mortgage out on it. I'm not certain of my debt to income ratio at the moment, but if I try to mortgage out a property to purchase another, does the rental income I anticipate getting from the new purchase factor into the debt to income calculation? Or am I looking at this all wrong and would be better to just to find a hard money lender to finance this?
You'll be able to access no income no doc investment property mortgages based on the rental income of the property . They're called DSCR loans . Can go to 80% of its value in some cases . Would do the DSCR cashout refinance from your existing property for the downpayment and do a DSCR purchase for the next property or the cashout may even be enough to buy it in cash . How much is the free and clear property worth ?
I'm exploring options to generate enough funds to purchase a $450k investment property but don't have the liquid cash. I have another rental property free and clear and considered securing the funds by taking a mortgage out on it. I'm not certain of my debt to income ratio at the moment, but if I try to mortgage out a property to purchase another, does the rental income I anticipate getting from the new purchase factor into the debt to income calculation? Or am I looking at this all wrong and would be better to just to find a hard money lender to finance this?
Hi Garrett.
yes lenders will consider the rental income of the new investment property. There are option to do it the conventional route, and there are options that does not considered DTI (like dscr loans). Let me know if I can help you out with this.
It is always cheaper to go with a cash out refi via conventional mortgage versus hard money. Go talk to a few lenders and get some numbers. Let them tell you about your DTI and whether they will lend.
Cash out refi is a significant path to building your portfolio. This is how you really crank your ROI up, making that original down payment work harder for you.
When you are in the acquisition phase of a portfolio you should be using other people's money such as mortgage to grow.
I'm exploring options to generate enough funds to purchase a $450k investment property but don't have the liquid cash. I have another rental property free and clear and considered securing the funds by taking a mortgage out on it. I'm not certain of my debt to income ratio at the moment, but if I try to mortgage out a property to purchase another, does the rental income I anticipate getting from the new purchase factor into the debt to income calculation? Or am I looking at this all wrong and would be better to just to find a hard money lender to finance this?
I would recommend checking out a DSCR loan for both properties. The one you are trying to cash out you should be bale to get a 30 year loan based on cash flow of the property. The new one, if it doesn't need rehab you should be able to get into for 20-25% down if the property cash flows. Let me know if you need help!
You'll be able to access no income no doc investment property mortgages based on the rental income of the property . They're called DSCR loans . Can go to 80% of its value in some cases . Would do the DSCR cashout refinance from your existing property for the downpayment and do a DSCR purchase for the next property or the cashout may even be enough to buy it in cash . How much is the free and clear property worth ?
I'm exploring options to generate enough funds to purchase a $450k investment property but don't have the liquid cash. I have another rental property free and clear and considered securing the funds by taking a mortgage out on it. I'm not certain of my debt to income ratio at the moment, but if I try to mortgage out a property to purchase another, does the rental income I anticipate getting from the new purchase factor into the debt to income calculation? Or am I looking at this all wrong and would be better to just to find a hard money lender to finance this?
This can be done via a DSCR (debt service coverage ratio) no income no doc loan for both the purchase and refinance . It is underwritten solely on the market rent of the property . What type of properties are they ?