I have 4 mortgages. 1 primary and 3 rental. I'm purchasing next rental. It's going to be my 5th mortgage. I was told by my two portfolio lenders that my dti is too high (>30% is it really high? ). They only count 60% -75% of my rental income, but 100% debt.
How can I get a mortgage?
You may no longer be able to use banks. This is when you start studying and learning creative buying strategies.
Market to free and clear properties. Over 40% of all houses in this country have no mortgage. Ask the sellers to carry back the loan for you. This is a very common practice.
Find private lenders to finance for you with a 5, 7 or 10 year balloon.
Take over existing financing - buying the property "subject-to". A perfectly legal way to take over the sellers loan but laws on how to do this vary by state. Lines 203 and 503 on the HUD show where you enter the loan amount you are taking over.
There are so many ways to buy houses without using traditional lenders and I promise every real estate investor with more than a handfull of mortgaged properties has run out of opportunity to borrow from banks.
Attend local investor meetings and start learning about alternative methods of finance.
Good luck to you!
I would go ahead and get a loan officer or mortgage broker to look at your situation. I've seen DTI being approved as high as 47% so you might be just getting advice from someone who doesn't have all the products you need.
I hope this helps and have a great day.
In addition to what others have said , make sure that each subsequent purchase is positive after accounting for the 75% of rent that the bank will recognize.
By doing this, you are slowly strengthening the average. If you want to continue with conventional financing, when you finally hit the ceiling maybe look at culling the herd. Selling a weak property or two should drastically change your ratio at that point.