How much of expected income from the other unit(s) can you use to help you get a bigger mortgage?

I've read that when buying multi-family properties(up to 4 units) that the lender will look at what the units are expected to bring in and they can count 75% of the expected rent as part of your income to help you qualify for the mortgage.

For example, lets say you make 100K a year and you want to put down a low amount, 3-5%(fha or conventional). It's generally recommend that you don't buy a house 3-3.5x of your income, so you're max here would be a house that's worth 300-350k.

However, lets say you are looking at a hypothetical property that costs 800K. It has 4 units that bring in $2000 a month in rent. Since you would live in one of them, you would only collect $6000 a month. That means that your lender would count $4500 towards your income.

a 772K mortgage at 4% would cost about 3.7K a year, figure 4.5-5K with taxes and insurance and what not.

I know that there are expenses to be accounted for but even with that at a 100K income you're bringing ~70k post tax or about 6K a month. The property is almost paying for itself completely, the only thing you would need to account for is expenses, and that will not be over 2.5k a month(33% of your take home).

What I'm trying to understand is how much more property can you buy if you go down the owner financing route and buy a multi-family, where the rents from the other units help you qualify for a bigger loan.

More real estate tips at Program Realty Wix site


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