Question about Calculating DTI for an existing property

[David F.]

I have a 4-unit property that brings in $144K/yr in gross income. Expense-wise my mortgage payment runs $55K/yr and PITI runs about $15K/yr for an obligation of $70K.

Which of these scenarios is correct as it pertains to the DTIR on this property?
1) 75% of rental income = $108K. DTI= $70K/$108K = 64.8%
2) 75% of rental income = $108K. DTI= $55K/$108K = about 50%
From reading, it seems to me that part of the reason banks take 25% off of the gross income is to cover for PITI, so it would seem redundant to count it again as in example 1 above. But then again, I'm not a banker. I'm trying to figure out how much debt this property will carry forward and need to be offset by my other income to know if I can afford to build another property. Thanks in advance.

[Christopher Phillips]

@David F.

net rental income = (75% * rent roll) - PITI.

25% is to cover expenses. per Fannie Mae: "The remaining 25% of the gross rent will be absorbed by vacancy losses and ongoing maintenance expenses."