Early – What I have found is that there is always some murkiness with regards to the underwriting guidelines that each originator has. Lots of people like to make postings about experiences that they have had and make it sounds like the gospel. I would preach that alot of the questions you have posted about are best discussed with the lender you select rather then with posters.
I would agree with FLU based on his locale and experience. We did our rentals opposite of what he did, we simply financed all of them and did end up putting down 25-30% in all the cases. We did not pull equity out of our home to make the purchase either. All of our rentals were purchased out of state and they are pure cash flow plays but we did use Aim.
Also understand that the levels of knowledge grow as you move inward. The loan officer is okay… your processor is better and will have better detailed knowledge of the underwriting guidelines as they pertain to your unique situation… of course you never have access to the underwriter but they are the golden goose. So yeah using a rough number of 75% of the rental income is a good swag. Seasoned rentals (having at least a tax return with that rental on it) are more helpful then recently purchased rentals but that doesn’t mean that they will not use your income from a recently purchased rental. You will most likely have to prove it. Also in my case we had to prove (I think) it was 6 months reserves for all of our properties combined. Again, this was our case with Aim and doesn’t mean it will apply to you.
When you say foreign properties do you mean internationally foreign? I am not sure how they would treat it but if they are on your schedule C then that would help, simply ask. If they are anywhere in the USA then not a problem at all.
