All Forum Posts by: Devin Peterson

Her monthly income is $12,333 (1099) mine is $3,333 (W2). Credit scores both over 780. Our only other debt is our PITI payment on our primary residence $1,005 monthly. We have $130,000 cash $50,000 stocks and around $140,000 equity in our house.

Purchase price will be around $590,000. PITI will be around $3,800. Ideally we wouldn't want to go higher than 10% down if possible.

The first lender we talked too said it would be problematic to be approved because my wife is a nurse (5 years in the field) and she is currently doing travel nursing contracts and is 1099.

If you are a lender and think you can help us, or if you know of a better way to get the financing for this deal aside from a 2nd home loan then feel free to reach out.

thanks.

It a situation like this, if you are going to use it for a STR you will want to use a DSCR loan. You will have to do 80LTV though. But the great news is there is no income involved and no dti. This is the program you’re looking for

1 Vote

There are plenty of 80ltv lenders out there still. I can put you in touch.

0 Votes

Charlotte, North Carolina

Quote from @Swaga Deb:

Hello All,

Fairly new investor here and I just finished my first successful BRRR. When I went to refinance I was told my Debt to Income ratio is off and I wasn't able to pull the full 80% out. (That was about a month ago) By chance I have possibly found another property and I planned to use a HELOC to purchase and rehab with my own funds. But I did not qualify because of my DTI...has anyone else encountered this and what did you do to solve your issues so you don't miss out on deals?

The bank has offered me another type of loan which is more of a 2nd mortgage on my primary that I could use but it's not a HELOC. Not sure if I should take this 2nd mortgage, any suggestions?

Any help would be appreciated as I am a newbie.

Thanks,

Swaga (Sha-ga)

What is your main purpose? If it is to just scale and buy a new property. DSCR loans are easiest. You cannot get a HELOC if the property isn't a primary. You may have to pay off some debt first. You can get a HELOAN but most lenders will require a first lien if an investment. My suggestion is a DSCR Cash out. No DTI. You can get your equity and buy new property.

0 Votes

Quote from @Caleb Smith:

On the last step of the BRRRR process, I am wanting to use a loan to refinance the property and pay back the hard money lender.

However, the lender I spoke with said it would be hard for me to qualify based on my past 2 tax returns.

Isn't the DSCR loan based on the projected rent and debt service, not personal tax returns and income?

Any help on this would be greatly appreciated.

DSCR is always self sufficient based off the income the property makes. Zero income, employment info, or taxes required. You can go up to 80% LTV with select lenders. FYI the more reserve you can show the more likely you are to get and LTV concession.

0 Votes

Kansas City, Missouri

Quote from @Armando Montrond:

Here is my current situation.

I currently am house hacking a 3 unit home in Worcester MA. (FHA at 2.25%) I have lived here for 1 year and want to purchase another property with a low down payment. I

have found credit unions will do 5% down on 1-2 units but the banks wont use my rental income that i earned this year because I don't have 2 years of rental income history.

Even if i had 2 years of rental history they will only take between 55-75% of that income.

I don"t have a lot of debt, I have my mortgage payment, and a student loan totaling 3900 a month.

I W2'ed 140k last year, so if that max DTI is 45% (5,250 allowed per month in debt) and I already have 3900 in debt, I cant have a mortgage payment above $1,350 PITI? Am i doing this math right?

So even if i put 20% down on a property, with 5-7% rates, the max purchase price I can do is $265k and with a 5% down im looking at 125k which is pretty damn near impossible around here. so looks like I would have to look for out of state investment property which is not ideal. Is my rough math right? How are people buying multiple properties but getting around the 45% dti? 140K a year is not small money either so its wild that I couldn't qualify for anything other than those incredibly low amounts

Am i looking at this the right way? Is there other ways to get this done (other than out of state investing) This is mainly a venting/frustration post cause I am trying to build out my portfolio but seems like this is a tough spot to be in especially if a lender is not willing to look at the rental income that will be on my tax returns

Hey Armondo, A few things:

The rental income cannot be used because it sounds like whatever program you are using requires 2 years of income taxes. There are programs out there that will use 1 year of tax returns, like HP - but your ami sounds high for worcester, MA. The reason you can only use 75% of the income is because of the vacancy factor. These are fannie/freddie rules. Every bank has this. 45% dti is mainly for conventional. Sometimes FHA can go up to 60% in certain cases. There are a few other ways to work around this issue. Feel free to PM if you have questions how.

0 Votes

Worcester, Massachusetts

Quote from @Puja Devi:

Hi guys, I'm somewhat of a newbie to RE. I started investing last year and have 6 units now, which I purchased either with conventional loans or with cash. I'm trying to scale so I need more access to capital and creative financing techniques. Does anyone have any recs for credit unions or small banks that they got a secured or unsecured business line of credit with? I live in New York and do business in Ohio. My LLC is rather new, so far all my purchases were done under my personal name. I keep calling around and sending emails and just have not had any luck with finding CUs that do business servicing or loans in the areas I know in Ohio!

Puja, If you are looking to tap into the equity of your investments. HELOCS are not an option unfortunately. You can opt for a heloan (they will only take 2nd lien position) and this is all drawn at closing, fully amortizing. Other option is to check out the dscr space for cash outs. If you don't mind me asking what makes you gravitate to business LOC as first choice?

0 Votes

Quote from @Joseph Bagley:

Could someone recommend a bank they used for a BRRRR in San Antonio?

I'll be an out of state investor.

Found an owner finance deal. I'm planning to rebuild the house and repay seller. Once house is rebuilt I'm wanting to pull money to pay seller in full and construction loan off.

You'll need to find a private / hard money lender for the first phase, best bet for phase two is a DSCR if investment property

2 Votes

Quote from @Brad Cook:

I have been looking into a career change, and unfortunately with my financial situation I am unable to jump into REI. I have been doing research into becoming a loan officer to learn the financial/loan side of REI while also having a stable income to start my investing journey, but don't have the loan/banking experience that most banks or mortgage companies look for when hiring either an assistant or LO, if there's any info or advice as how I can get started or what to look for when searching for a job in this particular field.

Brad,

you don’t need any prior experience to become an MLO. Just pass your nmls test and find a lender broker to sponsor you. Don’t be fooled - if you’re looking for stable and realiable income, it will not come easy an MLO this is a plant the seed and farm the crop industry. But for the experience, hands down the best way to get involved and learn a lot.

3 Votes

Quote from @Rami Sobhani:

I am looking to get the best mortgage I can get if possible and was wondering how many at a time I should use mortgage agents? What questions would you ask the mortgage agents?

You can call around and shop with as many lenders and brokers as you want. But don’t let them run your credit. You don’t want 5,6 lenders running credit at the same time. Nothing good will come if it from you. The best thing to do is have an exact scenario ready to discuss with the broker.

Ex: Purchase price, ltv, FICO, primary/investment, unit, sometimes location helps address if you have it.

Other things to keep in mind: what type of program you are looking to utilize for your situation. Conventional, FHA, USDA, Nom-Qm, DSCR, Bank Statement loan, etc.

0 Votes

heloc not allowed for investments with most lenders, heloans are around - up to 2 units allowed most places. Higher rate, but a way out.

0 Votes

Charlotte, North Carolina

All Forum Posts by: Devin Peterson

Devin Peterson has started 67 posts and replied 1534 times.

Post: 2nd home loan for STR

Post: Cash out refinance options?

Post: Debt to Income Ration Problems?

Post: Debt Service Coverage Ratio Loans

Post: Frustration/venting post any ideas about my situation with DTI

Post: Small banks and credit unions that do creative lending in Ohio

Post: Looking for recommendation of a Bank in San Antonio for a BRRRR

Post: Becoming a Mortgage Loan Officer

Post: How many mortgage agents should someone work with?

Post: Financing Options for an ADU

Devin Peterson has started 67 posts and replied 1534 times.

Rounded Star Post: 2nd home loan for STR

Rounded Star Post: Cash out refinance options?

Rounded Star Post: Debt to Income Ration Problems?

Rounded Star Post: Debt Service Coverage Ratio Loans

Rounded Star Post: Frustration/venting post any ideas about my situation with DTI

Rounded Star Post: Small banks and credit unions that do creative lending in Ohio

Rounded Star Post: Looking for recommendation of a Bank in San Antonio for a BRRRR

Rounded Star Post: Becoming a Mortgage Loan Officer

Rounded Star Post: How many mortgage agents should someone work with?

Rounded Star Post: Financing Options for an ADU

Post: 2nd home loan for STR

Post: Cash out refinance options?

Post: Debt to Income Ration Problems?

Post: Debt Service Coverage Ratio Loans

Post: Frustration/venting post any ideas about my situation with DTI

Post: Small banks and credit unions that do creative lending in Ohio

Post: Looking for recommendation of a Bank in San Antonio for a BRRRR

Post: Becoming a Mortgage Loan Officer

Post: How many mortgage agents should someone work with?

Post: Financing Options for an ADU