All Forum Posts by: Christopher Vis

Thanks for the additional input @Nick C.. I forgot to reiterate the debt to income ratio issue, which is the main reason I would have to prove the income. I'm now at about 41% where most lenders max out at about 43%. I would need the additional income from the next rental before my DTI would be acceptable to a lender.

Hi @Nick C., the purpose behind waiting a year is to be able to show a tax return with the rental income. Tax returns are the method I've been asked for in the past for proving income. I had lenders ask for leases, but that was to prove the continuation of the income, not to prove past income. Are there other ways of proving income that are quicker? What are some tips for pitching to banks? I will start researching now, but I'm an engineer, not a salesman :D I also need to start talking with banks about the qualifications on refinancing.

Thanks for the replies everyone!

Thanks @Natalie Kolodij, I've heard of the BRRRR strategy, just need more information on the third R I guess.

@Jeff Sprunger, I could send $3,000 per month, no problem. What would you do with $300,000 that gives you a better return, for no effort, and next to zero risk?

I had an idea (maybe not an original, but new to me). Would it be possible for me to: 

1.) Buy a house using OPM, 100%, paid for, free and clear, my name on the title

2.) Rent it out for about 12 months, just enough to report the income on my taxes

3.) Get a cash out mortgage/refi/loan to pay back the original investors plus 10% return (I would be saving the rental income from the prior year, estimating about $36,000, net, after expenses, to add to the cash out from the loan).

4.) Keep renting the home, now with a mortgage/loan

5.) Rinse and repeat

To add some substance to this hypothetical, here are the numbers I'm working with (I know it's possible, I have one now but had a $279,900 purchase price):

$310,000 purchase price, 7 bed 4 bath SFH, rented to 7 students.

$3605/mo rent income plus utilities paid for.

$341,000 needed in about a year to pay back investors ($310,000 plus 10% return, all depending on the original purchase price, but let's go with this as a conservative estimate).

My biggest questions:

1.) Is it possible to get a mortgage/refi/loan for this type of situation?

2.) What is the max LTV for this type of mortgage/refi/loan?

3.) Is it possible to have the title in my name?

4.) Is there something I'm missing/forgetting?

A little back-story:

I'm not new to rentals, I actually have the same 7/4 SFH rental now with 7 students in it with those same numbers as above, just looking to get another one. The problem is my DTI is about 41% (all conforming/conventional mortgages for rentals, no auto loans, student debt, credit card debt, etc... 760+ credit). I need to get creative with my next deal because I wont qualify for another conforming/conventional mortgage.

THANKS!

Chris-

Thanks for the replies everyone!

@Robert Crossley, I'm familiar with the BRRRR strategy. My biggest hurdle would be when refinancing time comes. With my current debt obligations, my maximum loan would be about $170k. My needs require an ARV of about $300k. I have not come up with a plan to bridge that gap yet. Are there investors/private lenders interested in the long game? Ones who are not worried about DTI ratios? That do not mind getting their returns for a decade or two?

@Tyler Ansell, I am not familiar with stated loans, I will do some resaerch now. My credit score is above 780. I am responsible with debt. Thank you for your input!

Hi everyone, my first post!

My initial strategy was to buy a rental, rent out the rooms individually (separate lease per room), save as much as possible, buy another rental once I've saved enough, then continue the cycle until I've replaced my salary with cash-flow to quit my 9-5 and raise my kids.

The problem is, my debt-to-income ratio is now about 40% and can only qualify for about $400/month more in additional loan/debt payments. I save about $1000 per month and would take me about 20 years to be able to pay cash for a house. Too long! I'm in need of ideas for a better strategy for funding my rental addiction.

I now have 2 single family homes (11 rooms total, 7 are rented, which is enough to cover all expenses for both homes) and used conventional 30 yr mortgages.

My initial idea was to market to individuals looking to invest, raise enough to pay cash, then pay each investor a fixed amount each month until they have been repaid their initial investment plus 12% to 18% interest (as a return on their investment). I would definitely need to consult an attorney and likely need to form some sort of corporation to do this kind of business, but just wanted to hear other ideas.