Your first buy-and-hold investment is collateralized from your personal income and debt, just like your primary residence. 20% down payment plus closing costs. Max DTI includes all debts plus new property minus 75% projected rental income.
Your next buy-and-hold investments can stand on their own without taking your personal DTI into consideration. Down payments beginning at 15% for owner occupied, and 20% for non owner occupied coupled with 660+ credit; and 100% of projected rental income offsets the mortgage payment.
Your first fix-and-flip investment will require 30% down payment and 5-10% loan costs depending on loan amount. 100% of the renovation costs are financed and the loan payment is interest only keeping your monthly costs low.
Subsequent fix-and-flips finance the investor up to 90% purchase and 100% renovation.
Home owner decides to purchase their first investment property in Hawaii. The condo will generate $3,000 monthly income based on long term tenants. Buyers income must be enough to support their personal debts, mortgage, loans and 25% of the new loan payment.
Experienced investor identifies a buy-and-hold to help build their portfolio. By providing a list of properties owned, establishment of LLC for new properties, 20% down payment and 660+ credit; investor does not need to show personal DTI as long as 100% projected rent will cover the new monthly debt (DSCR)
Investor identifies an apartment selling for $190,000 where renovated units sell for $345,000. 30% down payment $57,000 plus 5-10% for escrow and loan costs. Lender provides 100% renovation financing as long as loan doesn't exceed 75% ($258,750) of after renovation value (ARV).