All Forum Posts by: Matthew Sutton

Hi @Miguel "Mike" Perez, it wasn't so much intentional but that I just didn't think it was completely necessary for my original question/concern of my DTI ratio. With that said, I am employed full time so I do have a consistent income.

Since the my original post, my DTI concern has been lessened since I vastly overestimated due to an incorrect calculation. Along with the various resources/tips others have commented on, I am far more confident in my ability to obtain a loan when that time comes.

Thanks @Jeremy Pace, I will be sure to check them out!

@Account Closed, Thanks for the tip! I will be sure to look into S&T Bank.

Thanks, @Richard Fields

Hi all,

Just to update my initial post, after spending some time on the phone with the bank I discovered that my debt to income ratio is actual not as bad as I initially thought. To provide some context, I thought i was hovering slightly above 40% (yikes!) when in reality the bank pegged me at 24% so securing a conventional loan may not be as difficult as I first thought.

@Sara Eastler, I did not know the difference in lender's focus when considering moving above 5 unit MF properties, so thank you for that insight. Fortunately, my brother in law is an experienced MF investor located in the Pittsburgh area so I definitely have some resources to leverage in the case that I should seek a partner; something to keep in mind, at the very least. I will always keep an open mind and ask "how can I?" as opposed to any other statement that closes a potential door.

@Dillon Loomis, Outstanding to see you not only on BP, but in a similar situation as myself and similar goals! Rather than listing my current path, since much of it would be repeating what you have stated yourself, I will instead clarify that my recent actions of reaching out for preapproval. It is not so much indicative of me jumping the gun, but rather an effort to establish working relationships with the necessary individuals and "building a great team" for my investment path. For example, I have experienced phone calls with lenders who do not seem to care for whatever reason they may have. However, I have experienced calls with lenders who have been nothing short of excellent, whether in their professionalism, willingness to educate me further, and if nothing else, their willingness to provide me with further direction if they themselves may not be in a position to assist me. These are the contacts I am searching for so that when I am ready to pull the trigger, I know exactly who to run to.

However, I do want to confirm that we are in VERY similar situations and the options you are exploring (FHA, 203k, as well as purchasing an MFH by the end of the 2016/early 2017) is nearly identical to my own.

@Dan Rivera, I was under the impression (as I am currently exploring financing options much like @Ronald Green) that with FHA financing, 75% of the rental income is considered and taken into account when applying for FHA.

Are you saying that if 75% of a properties rental income does not exceed the monthly payments, then it will not qualify for FHA financing?

To clarify, I have spoken with two banks that (at least to my understanding) stated they will consider up to 75% of the lease income when applying for FHA financing, albeit with some further requirements.

I greatly appreciate any clarification if my current understanding is incorrect.

Thanks,

Matt

@Richard Fields and @Nicole Benischek,

I am assuming, with the requirement of being a primary resident for at least one year, that you can still rent out the other one, two, or three units (during the first year) when utilizing a 203k. Am I correct in this assumption?

I appreciate any clarification.

@Account Closed, thanks for the tip on Angel Oak Lending. I will be sure to look them up! As far as private lending and seller financing go, I am beginning to look into those more so as I discover the difficulties in obtaining a bank loan. At first, and as a first time investor, I was hesitant to go that route due to the shorter term lengths and higher interest rates. As I continue to read/research, I am beginning to see that may not always be the case.

@Michael T., thank you for reaching out, I have replied to your message.

Hi BP folks,

I will be as brief as I can be and expand in subsequent comments as necessary. I am 25 years old, still living at home (with parents), college graduate (wonderful student loans), and looking to invest in my first multifamily property within 6 months; my focus is buy and hold investing. Over the past few months, I have been reading, studying, and overall educating myself as you can imagine a serious first time investor would do.

I have been sending numerous emails and a few phone calls to various financial institutions looking to see what I may be pre-approved for. Currently, I am at the stage of taking action and, as such, am building a team to support one another, as well as my goals, and to transition out of "aspiring investor".

My main concern at the moment, is my debt to income ratio as it is unfavorable due to my student loans. As I stated, I have begun reaching out locally, but thought that posting on BP is the next logical/smart step.

I am in the Erie, PA area and I am focused on investing locally. If you are reading this and have some advice or contacts that you believe may be able to assist me, given my situation, then I invite you to share not only with myself on this thread, but any others that may be reading this with the same concerns as myself.

Best,

Matt Sutton

Thank you, @Joe D.!