QUOTE (donksky @ Jan 10 2008, 08:59 PM) This feature where you can buy rental properties as long as your rents from your total portfolio exceed expenses by a certain ratio--does this apply to lease-to-own properties as well (not just straight rentals)? I guess there`s not reason it shouldn`t...?
We have had some push back from lenders who argue that the additional monthly premium should not count towards the DCR. They arugue that if we defaulted and they had to take over the property, they would not necessarily be in a position to continue a lease to own arrangement. Therefore, only market rent would apply toward the DCR.
You need to be careful with this and may have to change lenders if you hit this one. For me, I count on my mortgage broker to have a solid enough relationship with the vendor that they can coax / cajole / nudge the lender into accepting the full payment.
By the same token, you need to also consider the impact on DCR when putting an RRSP second mortgage on the property. For more detail, visit my blog at
http://lease2ownbob.blogspot.com/ and read the October 5, 2006 posting. You can also keyword search the blog using "DCR" or hit the "financing" label on the right side of the blog.