Debt to Income

[Wade Coggins]

Hi everyone,

I am a relatively new investor from TX and purchased a Buy/Hold property at the end of 2015 via conventional loan. It is currently rented out and making great cash flow. I am looking to get a second property, again through convention loan, but had some concerns about debt to income ratio.

1. How long does it take an investment property to count as income, in regards to acquiring a second loan? I have read and researched that it is typically 2 years but I was not sure.

2. If in fact the first property I purchased takes 2 years to be counted as income does that mean its counted as debt? Reading that question back to myself I know it seems silly. But if a lender saw that the property was indeed producing but not ready to count that as income would they potentially consider it a wash? Maybe just me hopeful thinking!

3. Say the 2 years has passed and it has been producing income, what is the formula or percentage the lender will use to determine how much is counted as income on debt to income ratio? I am assuming they would subtract things out for their security such as annual expenses and vacancy?  

Thank you everyone for your time I more than appreciate it.