how to beat DTI for a single family home purchase?

[Eunseon Kwon]

Hi all,

My husband and I are new to REI and are trying to learn from you all. Here's our situation.

1. Have an SFH. Try to rent it out. --> It will be the first rental property. The house will hit the market next week.

2. Tries to purchase a new SFH. It's more expensive than our current house. Have enough for 20% downpayment + fees+ and some more

-Because of DTI, we cannot borrow money (no hard money or private money) for the new house unless we have tenants sign the contract with our current home.

Does anyone have any suggestions?  

[Preston Dean]

Quote from @Eunseon Kwon:

Hi all,

My husband and I are new to REI and are trying to learn from you all. Here's our situation.

1. Have an SFH. Try to rent it out. --> It will be the first rental property. The house will hit the market next week.

2. Tries to purchase a new SFH. It's more expensive than our current house. Have enough for 20% downpayment + fees+ and some more

-Because of DTI, we cannot borrow money (no hard money or private money) for the new house unless we have tenants sign the contract with our current home.

Does anyone have any suggestions?  

 Hi @Eunseon Kwon

Yes, my wife and I were in that exact situation and here is how we got around it. 

We got our house ready to rent & tried to find renters at the same time we went house hunting. Our lender required the same thing as what you are saying so what we had to do was have my business partner sign a lease for us that stated when he would move in and how much he would pay in rent. While at the same time we were screening real tenants. We used his lease as a place holder for about 24 hours until we could get someone to sign an actual lease. Lenders just want to see that someone will be covering the mortgage + some. 

Let me know if you have any questions

What has your agent said about this?