All Forum Posts by: Christian Wathne

I'm a millennial; worked near full time through 6 years of college. Took a few gaps to work and save. 

Sold cars for a few years, worked as a logger in the winters, and had my own window washing & gutter cleaning business. 

Graduated in 2011 with cash in my pocket and soon after purchased my first piece of real estate. 

Thanks all for the point about if a property has been around for more than 2 years the lender will go based on whats in schedule E. 

@Cara Lonsdale; I believe you're missing half the equation  in your example. You're adding in the income side, but you left the debt side blank. Adding in another property that has debt of 25k/yr and income (after the 75%) of $26250/yr will raise a persons debt to income ratio. Yes it cash flows a little bit, but the debt to income on that specific property is high and will raise a persons overall debt to income ratio. 

How would you be impacted if 5 years from now interest rates are at 7% and/or prices go down by 20% from current levels?

For great value check out Costco. I've been using their 'Harmonics' oak laminate. 8mm thick + a pre attached 2mm pad; cost is around $1.46 per sqft. Very easy to install, 6 inch wide planks. 

Here are a few pics of a recent install...

Thanks @Matt P. & @Kyle Boughton thats a good point about being able to add 75% of the new potential rental income. 

Up in WA even a great deal will push my dti higher

Doing an example case; hypothetically current properties with PTI of $88,800/yr and income of $215,000 (using 75% of rent + 100% of w2) puts me at 41.3% DTI

Adding in another deal similar to one that I recently did (monthly  PTI of $1650 and rent of $2200); using the 75% of income that would add $19,800yr of income and add $19,200yr to debt; making it $108,000 / $234800 = 46%

Is the 45% dti limit on investment properties a hard or soft limit, or any way around it?

Hi Everyone, Looking for your great advice and experience 

I'm working on acquiring a 4th rental and am concerned that a bank won't finance me because I'm already approaching the 45% DTI limit.

I'm calculating this by taking our (mortgage+tax+insurance on our current properties) divided by (75% of rental income + our w2 income) and I currently come out around 41%. Note; we have no other debt. 

I know there are commercial loans that would look only at the deal and not my personal finances, and there are options for hard money....but I've read about others getting up to 10 properties via conventional lending. Are incomes of these people so high that they stay under the 45%? Is 45% dti not actually a limit? How do I get my next deal financed? 

Every bathroom gets a 1ft x 3ft window and matching 1ft x 3ft shampoo shelf...

Adding on to what others have said; being in the city of seattle is very unfriendly to landlords, and will only get worse. Seattle though is small, and there are many great areas around it. For example, in seattle it is now illegal to perform a criminal background check on tenant applicants...makes no sense. 

I was investing in Bellevue/Kirkland/Redmond (the eastside), but this has become too expensive to buy into now. My personal thought is that Everette is too far north and Tacoma is too far south. There are plenty of jobs there, but nobody in the seattle tech scene wants to live that far out. 

My most recent purchase (BRRRR) was in Renton, I really like that neighborhood; its a reasonable commute to either Seattle or Bellevue. I'm also looking at Mill Creek and Bothell right now for similar reasons.