Getting funds when your DTI is too high....?????

[Clint G.]

I'm too new to try to use private money to fund deals. I'd rather not take that risk with OPM at this stage. 

Aside from owner financing, what other options do I have to purchase properties when my DTI is creeping up?

**My goal is buy and properties**

[Kevin Romines]

If your DTI is to high, I would first work to solve that issue. Can you do a cash out refinance of your primary residence to consolidate your consumer debt and also get you the cash you will need to cover the down payment and closing costs? You can do a 1st mortgage cash out up to 80% on a Fannie / Freddie loan. If that is not enough, you can follow it up with up to a 90-100% HELOC. Having a HELOC when you are investing can be a very valuable tool to use for your down payments and closing costs. Plan to accelerate the pay off or pay down of the HELOC as this is your tool for the cash needed for the next deal you buy.

Adding rentals should not move the needle on your debt ratio much in any one direction. The rents should offset the mortgage payment and throw off enough cash flow to overcome the 25% that the lender will detract from your lease amount.

Lenders use this formula on a new rental you are wanting to buy. Gross rents X .75% minus PITI. If the number is negative, that amount is added to your liabilities. If the number is positive, it is added to your income. So if you buy the property right, it should always cover the 25% gap and give at least a small positive income. You can literally buy your wealth, and constantly be lowering your debt ratio with proper planning and execution.

I hope this helps?