What’s your Buy and Hold strategy? Did you run into DTI problem?

[Mark G.]

Hi everyone,

I currently own 2 duplexes and my DTI is good to buy 1 more property and then I'll be at max DTI (50%) what do I do at that point? What's your strategy

Each time I buy a property, my DTI increases, even after calculating the rental income as income.

Example

Duplex #1 Annual PITI = 30,000

Annual Rental Income = 40,200

Duplex #2 Annual PITI = 31,200

Annual Rental Income = 41,400

TOTAL PITI $61,200

TOTAL RENTAL INCOME $81,400

My schedule E looks like this

Cleaning and maintenance = $350

Mortgage interest paid = $17,360

Taxes = $19,730

Repairs = $2,350

Not going to include depreciation as some banks are willing to remove that from the calculation.

Total expenses claimed on schedule E = $39,790

So on schedule E the bank would calculate rental income to be (income - expenses) $41,610

That is already below my total PITI

Now 50% (max DTI) of that income is $20,805

Is my calculations wrong here? PLEASE CORRECT ME IF I’M WRONG!

P.s I'm not counting my W2 income but let's say it's $100,000 at 50% DTI that's 50,000 (no other debt beside the 2 duplexes) But assuming I wasn't employed (when I reach my 10th property I'm going to quit!) how can one buy more properties when the current ones aren't sustaining themselves in the view of the 50% max DTI rule?