DTI and buying more properties

[Terri O'Brien]

I am in the process of buying my second rental property. I already own my home in Colorado, and have purchased one rental property this past April in Vermont. So I am a fairly new investor. I have asked the bank for a pre-approval on this second property. They said my DTI looks high. The duplex is $110,000 and I am getting a cash out refi on my first rental property in the amount of $55,000 which I am going to use part of this as a down payment ($27,500). So my mortgage would be $82,500. The tenants on the top floor pay $1295 each month and all utilities, and the tenants on the bottom floor are getting evicted, but I am planning on turning that unit into a long term rental and charging $1200 a month for that. So the rents will cover the mortgage. How do people get around this when they are building momentum without getting discouraged?