Debt to income ratio

[Tanner Leisure]

Hello everyone! This time next month, I will have hopefully closed on my first two investment properties. While in the process of everything, i noticed I was getting preapproved for less. Due to my debt-to-income ratio. My question- how long does your DTI take to bounce back with rentals? This last time, I was preapproved for 100k. Hoping I can get more for my next investment. Thanks!!

[Patricia Steiner]

It's debt-to-income. So when you're debt increases, you'll need the rental (or other) income to offset the debt. If your new mortgage debt is $400 a month, you'll want to cover that amount and more on that property to cash flow it and to not negatively impact your DTI. If your lease is for less than a year, your likely going to need a seasoning period and the income will be adjusted in the calculation to account for vacancies.

There's a lot on this topic available online; here's one:  https://www.valuepenguin.com/m...

You need to know lending guidelines as part of your business.  You should also look at Private Mortgage Lenders (not to be confused with Hard Money which I do not advocate).  These lenders often do not report the mortgage to the credit bureau and therefore it is not part of your personal debt.  But they do require a solid credit score to qualify.  

Hope this helps and congrats on your acquisitions!