Quote from @James Hamling:
Quote from @Jason Smith:
Hey guys,
The banks are telling me that they can not loan to me for a personal home because of my Debt to Income is to high for their underwriting.
I have been working to build my rental portfolio for the last few years and currently I have about 10 properties that cash flow over $7000 per month all together. I also have earned income as well. According to multiple banks they can only count 75% of the income of each property which is really jacking up our Debt To Income. We have about $30k /month in income and about $12k/month expenses leaving a surplus cash of $18k/month.
We were wanting to purchase a new home for ourselves and have the cash flow to make it work. However the banks that are underwriting these deals are killing us (Frost and PenFed).
The home we are wanting to purchase will cost about the same as we are paying now so the Debt to Income should remain the same.
I know I cannot be the only one that has ever had this issue. My question is, What are my options? How do I navigate this seemingly ignorant problem?
Aaaahhh, well, to "navigate this seemingly ignorant problem" I suggest you start by listening to what the debt experts are telling you, #1.
And than #2, go get informed on how to correctly operate and manage a portfolio. How to run the numbers, correct.
Oh.... You were thinking the lenders were the ignorant ones, not yourself...... Ah-yeah, gee, yeah-no, they know what there doing, you my friend do not.
They are trying to protect you from yourself and your efforts to over leverage yourself. because that's how you'd get to your next post of when the house of cards starts falling down and crushing you under it all.
What you detailed here is very normal and standard. You are simply NOT operating correctly. If want to argue the opposite, let us know where your cap-x account stands in reserve capital? How much reserve capital do you have liquid, at all? The answer is $0 isn't it....
It seems as though you may have been personally offended by my request for help. It also appears that you are making quite a few assumptions as to how I operate my business. Your response was not helpful and only serves as a blight attempt to bash others. As far as I knew BP is a place to for people to come for help and the community has been very helpful in doing so with the exception of you.
So let's start with your point #1 on listening to the professionals. According to them I am not the only one that has come across this issue, nor have any of them indicated that I am operating in a financially irresponsible manner.
#2 I am on BP in part to learn like many others here. I also read daily and attend RE investor training courses regularly. Again, you are assuming what my portfolio looks like with no information to base it on. Seems like you may need to be the one to gain some insight before chiming in your 2 cents worth.
Furthermore, you may want to educate yourself on the topic of debt to income (you know the original topic of this post). Most traditional banks will not exceed a 50% DTI which makes sense to a point. Let's say a person had an income of 1,000,000 per month and $500,000 in expenses which would make their DTI 50%. That same person also has $500,000 of cash flow and wont qualify for a loan that costs $1,000/mth. This is what I was fighting to overcome. Thankfully with the help of OTHER BP members we have found a few routes forward.
As for my cash reserves? currently over $230K in reserves. I prefer to use opm as much as possible.
So in the future before you get on here and prove yourself to the arrogant know it all that you are displaying yourself to be maybe take a second to realize that you do not have all the information and are making assumptions about me and how I run my business.
Please feel free to PM me if you would like talk more about it. Im happy to entertain that conversation.
To all the other BP members I apologize for this post, I dont take kindly to anyone attacking me or my business without having a basis to do so.
