All Forum Posts by: Jim Collins

Do you know a different lender with whom I can have this conversation with? 

It's a mix of personal name and LLC names. Of course they all have personal guarantee.

I am referring to rules Freddie has here https://guide.freddiemac.com/app/guide/section/5401.2 or Fannie has here https://selling-guide.fanniemae.com/sel/b3-6-05/monthly-debt... that debt paid for 12 months or longer by business can be excluded.

I am paying mortgage for all the rentals from business accounts. The only PITIA paid from personal account is for a personal residence. I am trying to get a 5% down first home buyer conventional on a fourplex for my daughter to househack and lender I spoke with says that we need to calculate the debt for all the other properties I own and pay from businesses into DTI.

Is it true? Or am I speaking with a wrong lender? And of so, any lenders in Texas who can help me get this conventional mortgage? My personal residence payments are less than 15% from combined personal income. But if we add all the rentals sure DTI will be over 50%.

I am a big fan of SBA Express loans. They are long term (mean low monthly payments and DTI), give you best rates (Prime + 6% or less) and they don't hurt your personal FICO, so you can keep adding businesses and grow their credibility to the infinity.

But to qualify for SBA your business must be 2 years old, must establish FICO SBSS credit, must have a strong cashflow and your personal FICO must be higher than 650. All that may take time, but it's worth it for every business you own. 

In the meantime Amex Business Line of Credit is probably the best for rates and terms. Get 3 months of solid business cashflow and apply for Amex BLoC.

Helocs hurt your personal FICO which may block you from getting business funding. Helocs are good for short term needs that you can repay quickly. If you can't then term loan will give you better deal and will report as installment loan vs revolving line of credit on your personal credit report which is much better for you scores.