DTI/number/lender confusion.

[Account Closed]

Hi,

House cost = $59,000, but with repairs the total cost came to $82,000. [I put roughly $8,000 down = I owe $74,000 on the mortgage (30 year fixed)]

My house was appraised at $150,000 before repairs. (I need to get appraised again)

My equity is $76,000 right?

DTI = 29%

Credit Score = 720

What would a real estate investor do?

Taking out a second mortgage for the full $76,000 to buy a couple more properties would put my DTI at roughly 51%.

Wouldn't that kill the entire purpose of what I'm doing? A lender wouldn't lend to me with a DTI like that, which means I wouldn't be able to purchase rental properties.

I don't think I'm thinking about this the right way. I would like to use the equity to buy two homes and rent them out.

If I hypothetically take out that second mortgage for the $76,000 and I try to buy a second property at 20% down for (simplicity sake lets say the second property is $100,000). I would need another $80,000 from a lender. Would they give that to me with a high DTI? I wanted to spread the $76,000 over at least two properties.

Edit**I'm currently renting rooms in my own home. I'm not paying for the mortgage at all, but wouldn't my lender, in his calculations, assume I'm paying the mortgage and use that in his DTI calculation? (DTI calculation above includes me paying mortgage)

[Jon Holdman]

Also, how did you pull this off? This is a HUGE discrepancy. If it was worth $150K before the work and you only paid $59K you got a screaming good deal. Is that appraisal really a replacement cost or county tax assessment? Investors can often find really good deals. And if the $150K number was after the work was done (or, considered that the work would be done) then this makes more sense. $82K for purchase and rehab vs. an ARV of $150K is 54% of ARV which is still a screaming deal. But to have actually bought it for 39% of its as-is value is truly astounding.