How to Lenders figure DTI Ratio on Rental Units?

[Daniel Dietz]

So far I have only bought property within my SDIRA on a cash basis, so have not needed to work with lenders. Soon I will be buying one or more rentals outside of my SDIRA, using 'conventional financing'.

The question I have in regards to DTI Ratio's is this; say I have 1 or 2 rentals that I have held for a year or more with a good rental history etc.... and I would like to look into buying additional properties. I DO understand the 'personal side' of my regular income vs debt..... but not the rental business side.

Let's say I had a building worth 100K, with a 75K loan, 16.5K of income, 8,25K of Operating Expenses, 5K of Debt Service for a Cash Flow of about 3.25K a year.

How does a lender look at that? Is it as simple as 5K Debt Service / 16.5K of Income for a 30% Ratio? If so, is that a 'favorable ratio' as far as getting more loans that could create the same numbers, assuming I had 25% down for them?

Just trying to plan ahead :).

Thanks, Dan Dietz