I am a newbie at this website and hence would appreciate any help/feedback.
After reading through the materials on the positive cashflow model, I have a very basic question. I have always been under the impression that banks/lending institutions will lend you money not only based on LVR but your earning capacity. If you earn say a net amount of $5,000 a month and you have a mortage of say $2,000, that’s probably ok. If you buy a 2nd investment property and therefore looking at an additional mortage of a further $2,000, that becomes a problem becuase one is deemed unable to service the mortgages (after taking into account your living expenses etc).
Am I missing something? Is it the case that banks/lending institutions will lend for purchase of more than 1 investment property or any number for that matter if one can show that there will be a positive cashflow? If your rental payments received is always going to cover your mortgage payments, that would be ok with the banks/lending institutions?
Sorry I sound so uninformed. Appreciate any feedback.
Many thanks.
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