Just getting started.... Couple things I can't seem to find

[Nathan Pitchford]

I jumped into the rental world by default after buying a house and not wanting to sell my old which I was upside down on. I decided to rent it rather than take the loss and even though I owe 30,000 over value I have positive cash flow of around 200 before expenses. Anyway this made me start to think about the fact that I could buy similar priced homes in foreclosure below market value and rent them and get closer to 600-800 positive cash flow. Anyway some questions behind that. If all goes well I would want to continue adding homes until prices go up or interest rates go up. All the homes will be financed. That's where my question comes in.

At first I thought I could do 10-15 year loans and still positive cash flow a small amount like 100-200/month, but I'm concerned then due to the higher payment and DTI. The main upside that I see is I would be building equity fast. The only downside I see to the shorter term loans is higher dti that may pose a problem when I want to add properties. Each property I add would require at least 25% down and eventually I would max out around 4 properties. Will banks make loans based on equity in other properties? Or am I better off going 30 years on these properties and getting higher cash flow showing extra income for the business and then using that extra income to qualify for more homes? Also that would give me more tax incentives with the higher interest, correct? It still seems eventually that I would hit a wall as most banks don't want anything higher than 40-50% DTI. Just curious what others are doing? If I buy a property and I show I have the ability to turn a profit, it makes sense to me that they would allow another loan and this would continue indefinitely, but I realize that this probably isn't how it actually works. How did most of you go about this and when did you hit that wall? How did you overcome it? Thanks.