How does one keep getting mortgages? Isn’t it capped on income ?

Question

I see these podcasts where many talk about owning 50 , 100 or even 400 properties. I understand the total mortgage payment should be at 30% of salary and wonder how someone can get so many mortgages? Can anyone help me understand this please

Greg Scott · Answer

You must shed the  employee-mindset.

Nobody ever said 30% of salary. Think income.  When you buy an income producing property, the income from the property gets added to all your other income as part of your qualification.

Andrew Weiner · Answer

There are private lenders that will take rental income into account.  They sometimes charge higher fees or interest rates but it’s the cost of being able to scale.  Also as you grow your portfolio there are lenders that will lend on a portfolio, so for example you can buy ten properties and take out one loan on that group.  Again these have disadvantages but it helps investors recapitalize and continue growing.

Arlan Potter · Answer

My debt to taxable income is about 55:1

But the banks do add back non cash expenses - depreciation for example so it is not so bad. But I have virtually no earned income any more. Only Rental income, farm losses, and some construction income. Not enough to pay FICA in years  You just have to be established. A proven investor. and have tons of equity and collateral.

How does one keep getting mortgages? Isn’t it capped on income ?

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