Scaling Strategy -- Snowball into "Self-financing"

[Kyler J Sloan]

I am trying to develop a long-term default financing strategy to fall back on before making my first investment, and would be thankful for any feedback which could be given for the one described below. 

I would like to see if it is possible to scale using only conventional financing, and home equity loans, in order to maximize self-sufficiency with respect to financing. 

Because my income starting out is expected to be around 200 K, I believe that I can rely exclusively upon conventional financing to begin with, until I exhaust the total of 10 mortgages for which I am eligible, and proceed to snowball all profits into paying off each consecutive property -- each time I pay one off, I will be eligible for another (10th) conventional loan, as well as a home equity loan secured by the recently paid off property, which I can use to buy 1-2 more properties. I would like to continue this way, with a maximum of 10 loans taken at any given time. In this way, I could eventually come to a position where it is possible to "self-finance" every new property I buy, and become self sufficient with regard to financing -- This, and still maintain exponential growth. 

Because I have reduced my expenses to less than 500 a month, and enjoy a more frugal lifestyle as it is, I am content pooling all available income to real estate, in order to accelerate this process. 

Considering that the back-end ratio needs to be roughly 36 percent in order to qualify for a loan, it seems that the mortgage costs associated with each newly purchased property should be 36% of the revenue generated by that property -- we might call this a 36% rule: 

mortgage cost / rental income = .36

Please let me know -- is this feasible or advisable? Am I missing something? 

I am not sure how long each property needs a rental history in order for it to be counted as income, if they only count a certain percentage of this income, etc. 

Thanks in advance. 

[Steve Vaughan]

Quote from @Jennifer Thomson:

I know this is old (3 yrs ago), but curious what you ended up deciding for your strategy?

Ha. I was about to comment without noticing it's age. 

Back in 2002 when I started, we had to be landlords for 2 years before they 'counted' it as income.  They counted 75% of rents. 

I was also going to mention it gets more difficult to get mortgages after 4. It's not smooth sailing 5-10. 

I used this same strategy at 4 for me, 4 for my wife.  Pay one off. Usually an easy decision as they weren't all good fixed rate long term conventional anyway.

 @Kyler J Sloan. I hope you were successful and would appreciate an update👍