Posted on: 10th Mar, 2010 06:29 am
I'm looking at this as a realestate investor. I'm purchasing my first home, which is actually a triplex $350,000 purchase price, 3.5% down. Living in one unit and having a roommate, while at the same time renting out the other two units, I will effectively be having the mortgage, insurance, taxes paid by rental income. which is $2500/month. I make $83,000.00 a year, and I barely qualified on the front end for that. In a year I want purchase another rental... $200,000 value, $40k down, and a loan of $160,000. The thing is this rental will have serious cash flow of $2000 - $1200 (insurance/tax/mortgage)... so $800 cash flow. However I don't think the loan officer will look at it like that,a nd would probably add up the total income of:
$85,000 annual income
$30,000 annual (current triplex)
$24,000 annual (if i'm lucky - they will include this income stream when calculating my income and ratios)
so hopefully he will look at the total income of $139,000... before calculating the front end/back end ratios on qualifing on a loan....
I think i can easily get the second house... but what about the third and forth? it's not realistic is it? not on $85,000k salary?
by the way... i have very little expenses... i don't have a car payment, $2k in student loans, very little credit card debt... nada....
$85,000 annual income
$30,000 annual (current triplex)
$24,000 annual (if i'm lucky - they will include this income stream when calculating my income and ratios)
so hopefully he will look at the total income of $139,000... before calculating the front end/back end ratios on qualifing on a loan....
I think i can easily get the second house... but what about the third and forth? it's not realistic is it? not on $85,000k salary?
by the way... i have very little expenses... i don't have a car payment, $2k in student loans, very little credit card debt... nada....
As you add more mortgages, your back end DTI starts to climb to well over 50%. Even though you will have rental income, the ratios are not good.
I dont think you can get away with buying the 3rd 4th or 5th house sorry.