Thanks @Jeff Dulla!
> 1. Everything you mentioned but Utilities. Also credit card minimum payments, student loans, car loans, leases, child support, alimony, etc.
I will go ahead and remove Utilities. These were Utilities the landlord paid (not ones covered by the tenant) so that's why it was in there to begin with.
In our software, we are not allowing someone to enter in credit card payments, student loans, leases, child support or alimony. What we're calculating is the minimum income required assuming you have no other debt, etc.
> 2. Depends on the situation. If you are talking about a seasoned investor with two years of tax returns there is a formula used based on their schedule E. If you are talking for a new investor, they will take a fully executed lease and proof of deposit from renter - take 75% of that for monthly income.
Yes, we're going to use this to determine how much they'd need to qualify for the next property purchase.
> If you are buying a brand new investment property they will typically have the appraiser do a rent schedule of comparable rentals - take the average rent they come up with and use 75% of that for qualifying.
Thanks.
> 3. I would use 45%. 50% could go through but is going to be the exception and not the rule.
OK. I can adjust that back to 45% instead of 50%.
> Is the point of the formula to get close to the actual debt to income ratio the underwriter is going to use to qualify? If so, it is leaving out all debts outside of the singular real estate transaction.
So, we're actually using it to determine the income they might need to make the purchases they're modeling for their portfolio. If they input into the software they want to buy a property every year or whatever, we want to show them approximately what their income will need to be to do that plan.
> Hope this helps.
It helps a lot. Thank you!
