For real estate investors DSCR (Debt Service Coverage Ratio) is very popular. Under this program if the rental income of the subject property covers the principal, interest, insurance and taxes (PITI) , you can get a loan. This is a pretty easy to qualify program as long as your PITI is covered . With high rent in NYC many of the real estate properties would qualify for the DSCR or rental cash flow program.

What said above is only the part of many requirements. Lenders want to see you as an experienced investor. The more experience you have the better terms and rates are waiting for you. Most of the lenders would like an investor to have at least one year experience on rental property management.  But this is not end of the world. There are some lenders may allow you without any experience depending on other factors are good. For example , if your credit is excellent , some lender would be flexible with your lack of experience.

How lenders calculate rental income is a question. Every lender is different and they take different approaches. One lender might go by the market rent only, while another lender wants to see your lease agreement or market rent.

If you have good experience with managing multiple rental properties and if you have good cash flow from the subject property you are the preferred borrower for lenders. How about if you don't have that experience. Another good option is a bank statement program. Lenders don't look at your tax returns or other income verification . They only check your bank statements. Usually , 12 months to 24 months back statements are accepted. Some lenders might go only for 1 month bank statement only.  The longer the period the better your rate is. 

Usually , the bank statement program calculates your average of bank deposits. For example, if you have a barber shop and you have around 20K a month average bank deposit , the bank will apply a 50% expense ratio to determine your income. In that case your income is 10K. With this 10K monthly income as a  self-employed borrower you might be able to buy a single family primary residence  for 800K with 20% down payment provided he/she meets other criteria of the loan program. Depending on your credit and rates and the type of the property you might be able to buy a property for more  than 800K.

For a bank statement program you need a down-payment of 20% to 30% depending on your credit score and property type and the purchase price.  For the lowest down payment lenders might ask for a minimum credit score of 760.  It should be mentioned that a borrower with a credit score of 620 might be eligible for this program.  As lenders keep changing their policies , it is better to consult with your loan officer, especially, if your credit is lower than 680.

Finally, you need to remember that as an investor your credit will play a big role. Your interest rate will depend on it. So, the better your credit  the better is your rate. Also , you can save on points.