All Forum Posts by: Gregorio Villar

That's correct, most lenders do calculate income based on the entire property as a long term rental...is it possible that you could find a property where this isn't an issue? I'm sure your income would be higher renting by the room vs renting the whole home, but as long as there are comps to support a value high enough for a DSCR ratio of 1.00+, you should be in the clear. So for instance, maybe you have a 4 bedroom home you can rent for $600/room. That's $2400/mo. As long as your monthly PITI(A) on that property is $2400/mo max, you're good. Qualifying for the lowest rate possible and putting a large down payment are a couple of ways to navigate the potential ratio issue and get closer to the number you need to make it work.

Also depends on the term - will you have 12-month leases in place for each room? If so a lender may be more open to that. I hope that helps, feel free to connect!

great idea...i should be more specific on the terms with what i plan to rent to see what can be worked out by the lender

0 Votes

Quote from @Stephen DeThample:

Quote from @Gregorio Villar:

Hi Everyone,

I bought my last 2 properties while I still had a W2 job. One property is a condo (in CA) that I rent out, and the other property is a house (in NV) that I live in and rent out the other rooms.

I quit my W2 job last year to start a business, which is slightly profitable today, but I reinvest everything back into the business.

I have a bunch of cash saved up and am comfortable deploying $100K into another property in Las Vegas ($80K down payment + $10K furnishing + $10K margin).

The only problem is that I’m not sure how to finance my next house without W2 income.

I talked to a few lenders about DSCR loans, and most say they calculate rental income based on the entire house, instead of by the room.

I would love to get the creative knowledge of the BP community on how to fund my next home 🙏🏼

I'm also open to any lender referrals 😊

Ask the lenders if they take MTR rent rates if you can show comps. Furnished rents are much higher.

ooo thanks great advice...thank you!

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Quote from @Brenna Hoberg:

DSCR loan options will qualify you based on the market rent for the property - this can be helpful if you can support projected rent above the mortgage payment. It will depend a bit on comps, similar to an appraisal.

There are other non-QM loan options for self-employed individuals that can use your bank statements (biz) to show cash flow versus, tax returns for income. Or depending on your total assets, including invested, qualify you on assets and credit alone. This typically requires 125% of the mortgage debts in available assets.

I am a lender and happy to answer any questions you may have!

Just sent you a message 🙏🏼

1 Vote

Quote from @Bill B.:

If you have 2 years of landlord tax returns you should be able to count 70% plus of that income. If you only have 1 year then quickly file thsi year’s taxes.

Ah I did not know that. 2023 was the first year I filed landlord taxes

1 Vote

Hi Everyone,

I bought my last 2 properties while I still had a W2 job. One property is a condo (in CA) that I rent out, and the other property is a house (in NV) that I live in and rent out the other rooms.

I quit my W2 job last year to start a business, which is slightly profitable today, but I reinvest everything back into the business.

I have a bunch of cash saved up and am comfortable deploying $100K into another property in Las Vegas ($80K down payment + $10K furnishing + $10K margin).

The only problem is that I’m not sure how to finance my next house without W2 income.

I talked to a few lenders about DSCR loans, and most say they calculate rental income based on the entire house, instead of by the room.

I would love to get the creative knowledge of the BP community on how to fund my next home 🙏🏼

I'm also open to any lender referrals 😊

1 Vote

Quote from @Allan Smith:

Agree with the above. But you pretty much need to show self employed income in a couple tax returns before you can get affordable loans again. Dscr is best bet in the meantime. Usually can't live in it with any of those loans. I've made money in real estate for 7 years now and still can't get o.o. loans.

what is "o.o."?

0 Votes

Quote from @Peter Sosnow:

@Gregorio Villar

Commercial loan at a community bank/credit union is an option especially if you have a pre existing banking relationship plus strong personal balance sheet.

i've never used a community bank, so i may look into that...thanks for the suggestion!

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i purchased my first 2 properties while I had a W2 income, but I left my 9-5 job in August 2023 to pursue building an online marketing agency.

other than a DSCR loan, what other ways can i finance another rental property?

a few relevant notes

1. i ideally want to finance the next house under my business

2. the intent is to buy a 3 bedroom house where we can use 1 bedroom to sleep, 1 bedroom as an office for the business, and the other bedroom to rent out

3. purchase price will be around $500K, and i can use up to $50K for a down payment

4. my personal credit score is 800+

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i have a pretty ridiculous situation with 2 tenants who share a bathroom. the 2 tenants buy their own toilet paper, and have basically been messaging me, accusing each other of using their toilet paper *face palm* as ridiculous as it sounds I'm thinking of just getting 2 separate toilet paper dispensers for the bathroom...thoughts on how to resolve this situation?

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Hello Fellow Real Estate Friends!

I've recently used the "Rent Estimator" on the BiggerPockets Tools and found it useful for assessing rental prices.

Is there a similar tool on BiggerPockets that helps me get Comparative Market prices for homes?

I usually ask my realtor to run comps, but was wondering if there is a BiggerPockets tool.

Thanks!

Gregory

0 Votes

All Forum Posts by: Gregorio Villar

Gregorio Villar has started 6 posts and replied 29 times.

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How to finance 3rd Rental - now with no W2 income

Post: How to finance 3rd Rental - now with no W2 income

Post: How to finance 3rd Rental - now with no W2 income

Post: Toilet Paper Trouble

Post: Comparative Market Analysis Tool on BiggerPockets

Gregorio Villar has started 6 posts and replied 29 times.

Biggerpockets Logo Post: How Do I Finance My Third House WITHOUT W2 Income?

Biggerpockets Logo Post: How Do I Finance My Third House WITHOUT W2 Income?

Biggerpockets Logo Post: How Do I Finance My Third House WITHOUT W2 Income?

Biggerpockets Logo Post: How Do I Finance My Third House WITHOUT W2 Income?

Biggerpockets Logo Post: How Do I Finance My Third House WITHOUT W2 Income?

Biggerpockets Logo Post: How to finance 3rd Rental - now with no W2 income

Biggerpockets Logo Post: How to finance 3rd Rental - now with no W2 income

Biggerpockets Logo Post: How to finance 3rd Rental - now with no W2 income

Biggerpockets Logo Post: Toilet Paper Trouble

Biggerpockets Logo Post: Comparative Market Analysis Tool on BiggerPockets

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How Do I Finance My Third House WITHOUT W2 Income?

Post: How to finance 3rd Rental - now with no W2 income

Post: How to finance 3rd Rental - now with no W2 income

Post: How to finance 3rd Rental - now with no W2 income

Post: Toilet Paper Trouble

Post: Comparative Market Analysis Tool on BiggerPockets