I just bought a house a couple months ago as my primary residence. If I form a LLC and transfer the the property to the LLC, does that free my debit to income ratio to purchase another property?
The house I bought was $245K and I make $50K a year, so I was just barely making it. I have no credit card debts or car payments.
I’m looking to buy my first REI in the next few months.
Transferring the deed will not change the financing agreement you have with your lender. You will still be personally liable for the loan and it will still be reported as your loan to credit reporting agencies. Nothing will change there at all. Actually transferring the property may trigger a due on sale clause. You may not be able to get the lender to agree to the transfer to a LLC and you will not get them to approve the loan transfer to a LLC.
With future purchases your new LLC will not qualify for a new loan with zero credit. You will be forced to use your credit to qualify. The good news is that most lenders will allow 75% of the rent credit towards the payment on property you own or are going to acquire and rent out your present home excluded.