Help I need counsel. What would you do?

[Joe Gravelle]

Hey BP'ers,

I thought I would write a quick post to make sure I am not missing something when considering my next step. I'd appreciate anyone/everyone's thoughts and input. I am in the process of looking for lenders but I want to seek advice before those conversations so I am as informed as I can be.

I currently only have one investment property which is generating good cash flow. I intend to rent out my primary residence, and in order to prepare for that I have refinanced from a 15 yr to a 30 year or in order for it to also cash flow when I find something new.

Here's the dilemma: I am looking for the best possible direction to take to acquire a third home. My primary residence is worth 250k and I owe 175k so there is the option to tap equity. On the rental property, I owe 150k and it is worth 200k. 

With both mortgages, I am currently at 30% DTI and I have no other debt with about 10k in liquid funds. This 30% DTI does not include rental income because I have only owned it/had tenants for 6 months, so I don't believe a lender would consider it. Are there ways to have a lender consider my rental income this early?

I like the idea of finding another home and moving into it to get owner-occupied financing. But whether I pursue owner-occupied or not the question of down payment comes into play. Should I tap equity for a stronger down payment? If so, this would obviously have a negative result on my DTI.

Is there a way to have a lender qualify me based on my rental income and perhaps what my current home would rent for once I move? Rather than only on my income from my career.

So I have given you my situation, before you give advice, it would probably be helpful to know my goals. I am currently interested in investing in residential real estate( SFR, duplex, etc).

Given this situation, what would you do?

Thank you in advance for the insight, I am excited about my next deal.