Hello, my friends and welcome to another episode of Ask Marco where I answer your investing related questions.

Today's question comes from Carlos and he says, Hey Marco, I recently found your podcast and have been eating episodes trying to get myself educated on real estate and passive income while following a lot of these episodes. There is one question that keeps popping into my head. How can I get financing for two, three, or say even six or seven properties? As the years go by and I save enough money to keep acquiring more houses, but my salary does not change much over the same number of years. Let me explain with an example and I am going to borrow your always easy to digest $100,000 example. To illustrate my point, let's say I make $100,000 a year from my regular job's salary. Let's assume I already have a mortgage on my primary home and a second one on an investment house.

I am able to save $20,000 from my salary every year, which conveniently enough it represents the exact down payment needed to buy one $100,000 house every year. The problem is my salary doesn't go up very much every year. To make things simple, let's say it remained unchanged for the next five years. In those five years, I would be planning to purchase five $100,000 houses, which would bring the total count of mortgages under my name to seven. In addition, let's say the first two houses I acquire have enough equity to tap into because of their growth in the last few years. At which point it could give me access to purchase another two houses, bringing the total number of loans needed to nine. The question is how would anybody lend me money for nine loans when my income is still just $100,000? Thank you for the great show.

Personally, you have opened my eyes to a whole new world and have given me a light to follow to get out of this dark and confusing place. I was regarding my finances for the first time. I feel it is possible to reach financial freedom.
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Carlos, thank you so much for submitting this great well-articulated question and I know that other people are thinking the same thing and also thank you for your kind words and I am incredibly happy and encouraged to hear that the podcast has been helping you and opening your eyes and providing a guiding light of sorts. Again, thank you very much for everything. So essentially what you're asking is how is it possible to finance multiple properties with only one salary? Well, the answer lies in your rental income from your properties and your DTI ratio, and that means your debt to income ratio.

So lets at these two things. So you see rental income can be counted when you're applying for a mortgage or refinancing an investment property. However, like all other sources of income, you must properly document it of course, and meet specific qualifying guidelines. If you already own the rental and you can document the income that comes from that rental, then your income is considered real rather than projected by the lender looking at your application and real rental income will be considered by the underwriters looking at your loan for rental properties, the lender will also look at the net cash flow and in most cases or most situations, net cash flow is represented by subtracting all your expenses from your income, the property's income. However, when it comes to rental scenarios,