Limit on numbers of mortgage you are allowed in Austin, TX

[Bryan Pham]

I am looking to purchase my first property in Austin, TX. A 2BD, 2 BA and house hack the other room for extra income. Let's say if I refinance my house to purchase another home, how many mortgages am I allowed? Is it determined by the banks, my income or limit per year? I am looking to implement the BRRRR strategy and is very new to real estate investing.

[Eric Guiltinan]

Most banks will only go up to 4 but mortgage brokers who sell directly to Fannie can do up to 10 loans. There is no limit per year. Each bank will have slightly different guidelines but they are generally going to be Fannie's guidelines or slightly stricter. I wouldn't worry a lot about the maximum number of loans. The thing most likely to prevent you from getting many houses is going to be your debt to income (DTI). For a conventional loan this is generally going to be 43%. Keep a close eye on this as you are acquiring properties. You need to know exactly how the rental income will be handled by the bank, how it needs to be reported on your taxes, and how much room your DTI has left for the next purchase. Always be looking one ahead, at least. I suggest searching the forums for some of your questions. These topics have been covered in depth.

I suppose my main piece of advice is that if you rent out a room in your house and you need that income to qualify for your next place then make sure you make it as official as possible.  Sign a lease, collect a deposit, and most importantly, report it on your taxes.