hard money to buy and hold

[Susan Capeta]

I do not qualify for financing because the bank says my debt to income ratio is too low. I have a lot of equity in one of my house and I want to do a HELOC but when they look at my last 2 years tax return they said i dont have enough Debt to income to get the heloc.

I heard some poeple use hard money to buy rental , than get it rented and find a bank to replace the hard money. How exactly is this done? If i get a hard money lender to get the house, the hard moeny looks at the house they approve. How do i get the bank to cash out the hard money once i get the renter in.. if they look at the last 2 years tax return they will not be able to cash the hard money lender out right? 

[Heather Easterbrook]

Susan,

There are banks/other lenders that will look at investment properties, even one sfr, from a commercial perspective. The rate is a little higher, but they do not consider DTI when qualifying the property. Instead, they look at the cash flow or DSCR. Rates usually start around 5%.

Let me know if you need further assistance.

Heather