If the calculation is equal to 1 then you are not making money, 1 represents that you have enough cash flow to cover your dept. less than one means you were not making money and greater than one means you have a cushion and making money. banks look for above 1 because they want to make sure you will be making enough money to pay them back and that you will have the money should costs rise and change your NOI, I know my bank looks for 1.25 DSCR . usually they just do not look at the properties, they will look at your personal situation ( credit card dept, alimony payments, medical payments) especially if they want you to personally back up the loan. there are a lot of explanations and probably better than i explained, all you have to do is look up DSCR, hope that helps.

At the end of the day, how much money are you going to make with your $500k investment and are you going to be happy with it and do you have enough cushion if something doesn't go out the way you plan it to go. 

Save up a reasonable cash cushion (six months rent, minimum) and you're set.

Why not do a joint venture with someone to give yourself a cushion. 

If i’m Budgeting for a 550-600K property, what kind of DTI “cushion” should I leave myself?

Charging the money up front gives you a cushion if the tenant stops paying.

It is also nice to have the HELOC as an emergency cushion in case something big gives out in one of our properties.

The extra months on top of the 12 months up front is for "cushion" because you are not going to make your mortgage payment typically until the 2nd month after closing, so your escrow account will not be replenished for those two months you are not making a payment.

If you have the cash handy, I would buy in cash 100% of the time, and have a large enough equity cushion to refinance should I desire.Further--something else to think about: is your agent an investor?

My year of financial runway enabled me to pursue that opportunity where my peers with a lower savings rate and little to no cash cushion could not have pursued that option.I'll have to look for this part where I describe this in the book, and make sure that my wording is consistent with my intention.