In Part 2 of this two-part series, you will learn to cash flow Schedule D: Capital Gains and Losses; Schedule E, Page 1 (Rental and Royalty Income); Schedule E, Page 2 (Partnerships and S Corporations), and Schedule F (Farm Income). When you finish this session, you will be able do a little “magic” and convert taxable incomes into cash flows, which you can then plug into your credit scoring model, debt-to-income ratio, or disposable income calculation.
Note: This session is designed for consumer and commercial lenders. This method does not follow Fannie, Freddie, or QM rules used in mortgage lending.