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Updated over 5 years ago on . Most recent reply

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Aleksandar Tanev
  • New to Real Estate
  • San Francisco Bay Area
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Improving Debt to Income ratio by renting to my wife's business?

Aleksandar Tanev
  • New to Real Estate
  • San Francisco Bay Area
Posted

Hi Everyone,

I am about to start my real estate investing journey, but my debt to income ratio is not that great.
I own almost 500k on my primary residence, and lenders don’t find me very attractive anymore.
My wife is running a small business from our home and we are deducting the mortgage as a business expense. The lenders do not seem to care too much about it, and they will still include the mortgage in my debt to income ratio when apply for a loan.
My question is – can I rent the house to my wife’s business?
I’ve done some research but was not able to find a straight answer, neither my tax advisor was able to provide one. My biggest concern is that my wife is on on the title which seems like a red flag.
Any advice or recommendation for a good CPA in San Francisco Bay Area(East Bay) would be highly appreciated. 

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Eamonn McElroy#5 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • Atlanta, GA
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Eamonn McElroy#5 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • Atlanta, GA
Replied

@Aleksandar Tanev

How is your wife's business organized for federal income tax purposes?  Schedule C, Partnership, C Corp, S Corp??

This information matters...

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