Effect of Working Less W2 Hours on Debt to Income Ratio

[Tim Porsche]

Hi There, I have question for you all that I'd greatly appreciate any feedback on. I currently work full-time and invest in buy and hold rentals on the side. Currently I have three doors. I've toyed with the idea of cutting back to working 3 days per week instead of 5 if the company would allow it and it could be managed feasibly. What I'm trying to figure out is...

1. Will the 40% drop in W2 income make it hard for me to get conventional loans on future rentals?

2. If yes are there any solutions to work around that problem, other than continuing to work full time until I'd have more rental properties and more rental income? 

My plan would be to use those two extra days per week that I would have off to look for, buy, and work on flip projects. I believe that by flipping houses I should be able to AT LEAST replace the income from working two less days at the W2 job. I'd really only need to do one or two flips per year. 

If it matters, I should still be in the green at least $1,000 every month after accounting for all expenses, without flipping any houses, just working 3 days and receiving the current rental income. I'm just trying to figure out if I'd have a tough time getting loans for future rentals if I made the change...any advice\info you can give would be great. Thanks!

[Stephanie Medellin]

General DTI for conventional is a maximum of 45%.

If the rental income has not yet been reported on your tax returns, they will take lesser of 75% of market rent or the lease amount.

If it has been reported on your taxes, PM me, I'll send you a worksheet to calculate.