Moving and keeping existing home as rental or owner finance...

[Scott Nipp]

We are still very new to REI and are still in pursuit of that elusive first deal. However, we are also in the market to upgrade our current living situation as we have pretty much outgrown the 3/2/2 that we are currently in. There are some 5/3/3 homes available in the area we want that we can make work within our current budget but I don't know about qualifying for the mortgage with our current mortgage. Does anyone have experience with this? What options might be available to us for this?

One option I THINK we may have is to sell our current house to our LLC. I think we could swing a 20% down payment from our LLC but I haven't actually applied for any mortgage financing with the LLC as of yet. Does anyone know of any good lender options that might provide us with a best shot at getting a mortgage for an investment property?

I know that people do this kind of thing all the time, I just don't know how.  We really want to keep our current house as an investment property though.  We don't want to just put it on the market if we can at all possibly avoid it.  In fact, we would be more apt to simply stay put until we can come up with enough capital to overcome any debt to income issues that might be the primary problem.

Here are some rough numbers...

Current house  retail ~$190k with a current mortgage payoff ~$165k and monthly payments about $1550 (tax and ins escrow included).

Target house listed $255k

I think I can use a VA loan on the new house and our credit scores currently are about 750. Our combined annual income is about $190k. This is where I'm not sure if we can qualify on the debt to income ratio?

Thank in advance for any thoughts, suggestions, or advice.