All Forum Posts by: Greg R.

My understanding is that these types of loans require 20% down in order to use projected cash flow toward qualification. Meaning, the property can debt-service itself making qualification very easy... well, besides for the 20% down. 

And like others have said, less than 20% down, rate is going to be up there and there will likely be MI. Both of those will cut into your cash flow. 

Our best one is the guest house on the property where we reside. It's a little 1/1 420sqft, but this thing is occupied 90%+ of the time and regularly generates 3k+ per/mo cash flow. Pays a significant portion of my mortgage.

If possible try to find a house with a guest house/ ADU. Or maybe one that can be easy to divide into two units. The right kind of property that fits that category can cash flow very well.

Thank you all so much for the info, it's been very helpful. Seems that the consensus here is to reach out to some other lenders. A bit earlier I reached out to a broker in the state, as the other lender was direct. I'm awaiting to hear this individuals assessment on my finances/ qualification. I'll update this thread to let everyone know the result.

On a different note, I talked to the "original" lender again and apparently he's counting depreciation and mortgage interest (on my taxes) against me. So he's counting the tax I pay in my PITI against me, as well as the write off. I don't understand this stuff that well (hence me relying on people a lot smarter than me), but it appears that he's hitting me on both ends with his assessment of my taxes to form his DTI.

Hey guys, first off thanks for taking the time and providing feedback. I got a very surprising response from a lender for a property that I'm in contract for. Short background, I own 3 properties... two of them multi family, and one short term rental. In both of my multi families I have positive cash flow. My SRT is a guest house that's attached to the property where I live. The guest house is generating more than 50% of my mortgage payment for that property.

So here's the scenario... I'm in contract to by a second home/ vacation home out of state. I contacted a lender in that state and provided a my info and he saw enough to give me a pre approval letter. As soon as I'm in contract I provided the lender all my documents, bank statements, check stubs, tax returns, etc.

So about 2 days in this guy tells me that all my properties are negative cash flow and that my DTI is too high and he can't get me approved for the loan. His rationale is that when he's looking at my tax returns he's looking at my write offs, such as depreciation, repairs/ renovation, mortgage interest, and concluding that since I'm writing off "x" amount, that I'm actually negative cash flow.

However, that's not what's happening in reality. One of my properties alone I'm almost 2k positive cash flow a month. I have signed leases and have years worth of bank statements to prove that I'm bringing in the rents (which I'm also claiming on my tax returns). I even called my CPA and he reviewed my taxes and said he though they were very strong and were in line with the other investors he works for. 

To add a little more context I just completed a refi on one of my multi family properties last week and I was easily approved and was even offered to pull out a significant amount of cash (+/- 200k), which I declined.

Further, I know this is a vacation rental, so there is no projected rental income that I can use toward qualification. I then asked the lender if I can just go 20% down non-owner occupied so I can use 75% of the projected rental income toward qualification and he said that even then my DTI would be too high and I still wouldn't qualify.

A little more context, the only debt I have other than my mortgages is a $500 car loan. I asked the lender if I paid off the car note if that would help the situation and he told me no. I am also a W2 employee have a very stable six-figure income (for many years) along with other sources of income.

At this point I'm wondering what's going on. Is the way that this guy is looking at my finances an industry standard? He seems to have a good reputation and apparently works for one of the top mortgage companies in town. He's saying that my actuals essentially don't matter. He's only looking at my 2019 & 2020 tax returns and is evaluating everything through that lens and his interpretation of my taxes. 

My current/ preferred lender (who is not licensed in the state where I'm looking to purchase) never had a problem getting me qualified for properties that are much more expensive than the vacation home I'm looking to purchase.

Please help me understand what's going on.

Much thanks!!!

Hello, I don't know about other cities/ states, but my understanding is that in CA landlords are not permitted to disallow ESAs. 

@Kelly Ann Bergeron I'm really sorry to hear about your diagnosis. I am a disabled veteran who served in Iraq, so I'm fully familiar with many of the symptoms you described. 

You must not have read the entire thread. My main dissatisfaction was due to the fact that the tenants lied to me, and falsified their application. For your information, I ended up renting to another tenant who has a dog - not an ESA, just a plain ole' pet. They were honest & upfront with me which means a lot. 

People who lie to landlords and want to try to find their own clever ways to "cheat the system" get no sympathy from me. Also, your implying that me and others are discriminating is disgraceful. Please know the facts about me and my situation before making uneducated accusations. 

@Tyler Callea is that so? What is the name of your firm? Where are you located? Please tell everyone so they know who exactly to avoid. You are a hack and are clearly ignorant about the topic. However, I'll be happy to entertain you... Tell me exactly which laws/ regulations I violated. And be specific. 

 Tyler, clearly you are the ignorant one and don't know what you're talking about. I'm very familiar with this situation and consulted with several attorneys about it. I'm well within my right to not allow pets on my property. Furthermore, I'm well within my right to know if perspective tenants have an animal of any type. Thanks for the comment though. 

 Hello Rob, thanks for your detailed and thorough reply. I don't want to get too specific about this situation in a public forum, but I will definitely talk to my insurance to see if the his breed of dog is considered an "attack dog". Thank you for the link as well, that contained some very useful information. 

The real estate attorney that I've been talking with (who is held in high regard), stated that legally the tenant doesn't have to disclose that they have a emotional support animal. I found that a bit odd, but that's what she said. 

I have seen the documentation for the animal, it's basically one of those "go online and pay $99" type things, but again, attorney said it was legal. 

Very good idea about insurance and M2M... I have two more units on the same property that will be available soon. I think I am going make my lease M2M with a guarantee not to raise the price for 12 months. 

We did screen the tenants including a background check, credit, and a check for eviction lists. They came up clean. 

I guess for me, it's all a learning experience. I have learned A LOT through this ordeal about my leases and all these types of situations going forward. 

 Thanks Carlos. For me it's really about respect for the other tenants. I don't want the other tenants having to deal with loud/ unruly animals. This is a multi family property, so multiple units in close proximity. I've already spent a lot of $ to soundproof common walls; however, it's almost impossible to block out a dog bark.