With the rental income from the existing rental, I will be just under 48 percent DTI counting the existing mortgage and the projected mortgage against my expenses.

Because the US dollar is nothing but a big fat IOU from what is always touted as the strongest, "flush with cash and opportunity" country on the planet, we as Americans continue to go on with our lives investing in the same asset class (equities) and continue doing what we always did because we are satisfied getting what we've always gotten and frankly we are brainwashed and programmed to believe if we continue to invest in American companies, we will continue a 8-9 percent year over year return.

"The old hindsight's 20-20 deal" might be true, but so are cash-out refi's, where you could leverage those properties, especially the owner-occupied one, for most likely the best rates you'll see in your lifetime over the next few years.

Maybe start at 5 percent and go up 1 percent per year until you hit 9.

http://www.biggerpockets.com/renewsblog/2013/04/14/the-2-percent-rule/http://www.biggerpockets.com/renewsblog/2013/03/30/battle-of-the-cap-rates/

No sense in paying that down extra when you can get properties throwing off way more than the 3 to 4 percent you are paying on your home each month.

The remaining expenses carryover to the future as a Passive Activity Loss (PAL).Real Estate ProfessionalTo be a real estate professional, an individual must spend the majority of his or her time in real property businesses:• Development or redevelopment• Construction or reconstruction• Acquisition or conversion• Rental• Management or operation• Leasing• BrokerageThe taxpayer must meet each of the following two time requirements:• More than 50 percent of his/her time working in real property businesses; AND,• More than 750 hours of service during the year.One spouse alone must meet both tests.

They will have more experience with all the paperwork that is required for this financing package.To purchase and finance a home through Fannie Mae with more than 4 existing financed properties, investors must meet all of the following criteria:* Make a 25 percent down payment on the property; 30 percent for 2-4 unit* Minimum credit score of 720* No mortgage lates within the last 12 months on any mortgage* No bankruptcies or foreclosures in the last 7 years* 2 years of tax returns showing rental income from all rental properties* 6 months of PITI reserves on each of the financed propertiesand to reduce fraud, *you must sign a 4506-T -- a form giving lenders permission to verify your submitted-with-the-loan tax returns against the official, IRS-filed version of the same.FYI: For refinances, loan-to-value is capped at 70% for all property types.

This is also why house rehab is popular and also wholesaling because these avenues only take a small amount of money to get going with the first one.If someone has 500k for example they can buy a triple net property and buy at a cap of 6 to 9 percent going in and get mailbox money.

Could I simply write the purchase price as "current + appreciation at the end of the option term" and define the appreciation as the Q1 2014 average appreciation percent for our city from next year's LA times?