Quote from @Taylor Johnson:
Hey biggerpockets fam I am having issues with financing and wanted to see if anyone had tips!
I bought 2 properties about 16 months ago, did repairs on them so on my 2021 tax returns my real estate shows a loss, with both mortgage payments my DTI is around 32%, I have 2 self employed businesses and I am having issues getting approved for a cash our refi on one of my properties.
At current situations both properties combined cash flow ~$600 but from talking to a few lenders that doesn't matter since my most recent tax return shows a loss.
I wanted to reach out to see if anyone had gone through this or had ideas for things I could do besides waiting until I file taxes for 2022.
I have cash set aside that I was hoping to invest this year into another property but being held up on the lending side
As mentioned above a DSCR loan is made for borrowers buying or refinancing a non-owner occupied property if their debt to income ratio does not work on a full documentation approach. However, I find often loan officers do not give enough rental income. When using the schedule E of the tax returns the LO should add back the deprecation, taxes, interest, insurance, HOA dues (if applicable) and non-recurring expenses if this can be documented (some of your repairs might fall into this category). What that often does is bring back what might be a fairly large schedule C loss into a much smaller loss or even break even. So, if your loss is say 150 bucks a month after adding back the above, then it is obviously to qualify then with say the entire mortgage payment going against you. No idea if this is the case in your scenario but I do see it a lot.
