Quote from @Robert B.:
Thx so much.
As a newbie, I had no idea such a loan exist.
But what about a conventional loan for a residential rental property? I gather the costs and interests rates are lower for this rather than a DSCR loan.
As long as I have adequate savings, and a rental producing income, do I have to have a steady income, as in a job, to qualify for such a loan?
Bob
Hey Bob,
To answer your question about using the rental income to qualify for a conventional loan, it's important to know that conventional underwriters look at your tax returns to prove the rental income was claimed. You'll want to make sure you have a good accountant that does show income on paper so the underwriter would consider it on a conventional loan. This would also require waiting some time to file taxes before purchasing another property with the income.
This is where you're going to benefit from a relationship with a knowledable lender who understands conventinal financing but also offers alternative financing. Where one proeprty could work with your DTI as a landlord, another may not.
Another thing to consider is many investors avoid conventional financing when they have alternative income types just because the paperwork is a headache and they can do more business using private money. You may find this is the case for you too.
Let me know if I can be of an help as you begin your investing journey!
