DTI and House Hacking a 4 Plex

[Brian G.]

I'm trying to figure out how to calculate what my maximum total purchasing power is on a OO (house hack) 4 plex. I have no consumer debt of any kind with one outstanding mortgage of approx. 87k on a cash flow positive rental property with plenty of equity and several years of Schedule E's. Presumably this property does not negatively affect my DTI but may add a few hundred dollars to the income side of the DTI calculation. Can I use the formula below to back into my total purchasing power?: W2 income (gross?) + (FMV rent x 3 units x75%) = Income divided by PITI of newly acquired OO 4 plex = DTI %? DTI% not to exceed 45%? Thanks.

[Chris Mason]

( PITI of subject property + the $25/mo minimum payment on the credit card that you pay off every month, if applicable ) / ( W2 income + subject property rental income at 75% + other rental property net income properly calculated ) = DTI.

The math is different for non-owner occupant properties.