New investor with question about financing

[John Anderson]

Hi. Forgive me if this is too newb.

I'm looking to invest $500k cash into rental properties for income.  I want to leverage, but can't use income from other sources to satisfy debt to income ratios (I'm self-employed).  So, let's assume I buy a 200k house and get it rented.  How difficult is it to get financing so that I can pull some of the equity out to buy more homes?  Is there a way to do it without showing income from other sources?   It seems like this would be a common problem (meeting debt to income ratios).

[Michael Glist]

There are lenders that do stated income for rental properties. They will weigh heavily on the property performance and cash flow as opposed to your personal DTI. This allows you to get a property rent it and the qualify based on the rental income as opposed to all of your personal obligations. This would be the way to go because most will also only look at the property you are purchasing/refinancing and not your whole portfolio. This helps with the "Cash Reserves" as most actual banks or mortgage lenders will require 3 months reserves of PITI for EACH property you own which can add up quickly.