How much of a mortgage payment can I afford?

With a four family property, each renting for $825…that would be a gross monthly rent of $3300. How much of a monthly mortage payment can I afford? Do I simply subtract 40% of the gross rent?
I’m evaluating a four family deal to come up with a proper offer, for wholesaling.

There are alot of factors a lender must weigh to determine someone’s max. affordability limit; variables like DTI, gross monthly income, debt burden, front and back end ratios to name a few…

If you are making an offer, there is no better time to get yourself in a position of readiness (prequalification) so that you can pounce (if the opportunity warrants it).

If you don’t want to consult with someone, then you can do this for a rough estimate:

  1. (Gross Monthly Rental Income x 75%) + Other Gross Monthly Income (sources other then the investment you are purchasing).
  2. Use a calculator like this and make sure to use the new qualifying income from the #1 calculation.


Scott Miller

Hi, if you want to make a proper offer to wholesale the property you have to figure out how much you want to make out of the deal. It also depends on the area you are in and what properties are going for. In some areas a good rent to value is not possible. For instance in the area I am buying rental properties at the moment with that gross income I would pay or offer around 160k for that property if it needed no work and after I really ran the numbers. If it is in an area where prices far outpaced rents then you need to get comps to see what the property value is in the area you are in for a 4 family to see if it is prime for a flip. If there is a lot of equity in it then it could be sold to another investor quickly as some investors dont mind putting down a lot of money to break even. Find out what 4 units are selling for in the area it is in. I guess it really depends on how much you want to make on the property.