Income to debt problems - Posted by Greg Henry

Posted by Les on June 29, 2003 at 11:58:26:


It’s hard to tell what the difficulty could be from the information provided, however, one thing that can cause a DTI problem is the way lenders calculate rental income. Typically, they discount rental income by 25% to account for vacancies, increases in expenses, etc…

Drop me a line if you would like for me to do the DTI calcualtion for you.

Income to debt problems - Posted by Greg Henry

Posted by Greg Henry on June 28, 2003 at 22:48:45:

I currently own 10 single family homes and having problems getting the banks to lend me money to purchase more rentals. All homes have a + cash flow yet banks tell me my debt to income is a real problem. Some of the homes are even paid for. I just want to buy a few more but having problems. Thanks for any advice!!


Try the commercial side - Posted by DaveD(WI)

Posted by DaveD(WI) on June 30, 2003 at 15:18:34:

It’s one bank, but there is actually two businesses inside of the building. All those rules you just pointed out are for the retail side of the bank. The ratios must be in line (Freddie, Fannie, etc.) for them to sell the note on the secondary market. Looks like you’re ready for a portfolio lender which is someone who does not sell the loan, but keeps it for their own portfolio. The bank can be a start, because with portfolio loans, you pretty much make up the rules. A prudent investor would be starting to look for private money as well.

All the best. . .

Re: Income to debt problems - Posted by Alex F. (CA)

Posted by Alex F. (CA) on June 29, 2003 at 23:18:24:

Have you tried several other banks or lenders? One bank’s rule of limiting individuals to own 10 properties will differ from another bank.