LLC Hard money loans and debt to income

[Vincent Ballew]

I have a situation that I would be very appreciative if I could get some help with. My family and I are relocating to a different state and I was recently denied a loan for a primary residence because my DTI was too high. We own (6) rental properties, all conventional financing, and I am switching jobs/states in which I will be taking a reduction in salary. We will be selling our primary residence in order to help lower my DTI and we are being told from our lender that it still won't be enough. So my idea is to reach out to a hard money lender. With the hard money lender, I will need to setup an LLC to hold the properties and refinance through them. My question is: once the properties are refinanced through the hard money lender and in the LLC, will this lower my debt to income? I am hoping that it would in order for me to qualify for a loan to purchase our primary residence. Again any advice or answers would be very much appreciated.

[Nicholas Covington]

@Vincent Ballew
Common misconception is that moving properties into a LLC removes them from your personal DTI. That is false. If you are the personal guarantor of that loan you are still financially obligated to pay that back. Most LLCs are not set up to be the only thing backing the loan. When you go to get your primary they will find those homes are connected to you and asked for their documents. The only way to offset this is to report your rental income on tax returns and use that to offset and mortgages on them.