My guess is for those who bought 2M properties with loans probably have assets somewhere else (like in stocks or other properties). Since they can qualify for 1.6M loan and rates are low now, why not get a loan rather than putting down a large sum? As long as the risk is manageable (lost job, market crash, etc) w.r.t. to the safety margin (size of loan vs size of assets elsewhere), taking advantage of the current low interest rate is a smart thing to do.
Personally, all of my rentals have positive cashflow from day one (well, not day one but when itās fully occupied after rehabbing is complete). Most of them have loans. My rentals are at the lower end of each market so they have relatively higher rent-to-value ratio (1% rule would be fantastic). In my opinion, no investment beats a leveraged lower-end-of-the-market high-rent-to-value property, as long as you can handle the usual headaches that come with being a landlord (at a reasonable level of course). You get the stability of real estate investment and high return due to the leverage from loan, both from rent collection and appreciation. The key is to make sure tenants are collectible and vacancy rate is low, which means you need to have enough positive cashflow when market demands lower rents or when you are hit with a few problematic tenants. I had my share of dealing with bad tenants and so far I think I mostly have lucked out without taking a sizable loss. When you only have one property the tenant hit/miss can be significant, but after you have accumulated a few they tend to average out.
My overall LTV is below 50%, and I am not sure what my DTI is but it shouldnāt be terribly high (wuqijunās is over 50%?). I have investment in stocks that acts as my reserve, which provides me with the peace of mind even if a big earthquake flattens some of my properties.
, but your DTI might be over 100% unless you did PITI divided by net rent. If you used gross rent, your DTI is overly optimistic.