My DTI has hit a wall

[Brent Salazar]

Hello BP,

I have an interesting problem. I currently own 2 duplexes in my home town. 1 has tenants and the other I am house hacking. I am ready for my next deal and have hit a wall with conventional financing. The banks will use my W2 income and 70% of my total rents as income, and the mortgages/ credit card/ car payment/ ext as debt. I ran a scenario where I project my income with all 4 units rented and my DTI is maxed out for lending. Both units are still cash positive after counting 70% of the collected rents. See my financial footprint below. I have well over 20% equity in each property and have thought maybe I could shield the debt of these properties by either transferring ownership into an LLC or possibly having an LLC purchase them from me through a commercial lending? Not sure if either of these is an option. Thank you for your infinite wisdom!

income:

“Rents: 100%/ 70%”

Unit 909: 1300/910

Unit 909 1/2: 1400/980

Unit 101:1700/1190

Unit 101a:1000/700

w2: 4800

total:10,200 / 8580

expenses:

Truck: $500

Line of credit:$125 “$0 balance”

MV mortgage:$1550

Sedro mortgage:$1550

total:$3725

DTI:36% / 43%