Qualifying for a second mortgage with a STR

[Derek Buehner]

What should I expect when applying for a second conventional loan to purchase a primary residence, considering that I have an existing short-term rental property with a year of history and an average monthly profit of $400 after expenses, including the mortgage? How do lenders evaluate the stability and income from an existing short-term rental property when determining debt-to-income ratio? Thanks in advance! 

[Jose Falconett]

You will need 2 years tax return history of POSITIVE net income on the property. 

The way my strategy works is to lease out the existing property that is at least 125% of the mortgage amount (so long as its true) and that is the workaround. The lender will be able to write off the existing mortgage as if it didnt exist according to your DTI.

Good luck