How to buy rentals quickly as DTI is increasing

[Luke Miller]

I know everyone has their strategy, but I am trying to decide how best to proceed.

1.) Local market: rentals provide 17-21% annual returns for single family detached priced between 40k-70k. The market is great for buyers and I target those in established neighborhoods (1998-newer) within 20 minutes of where I live, since I rehab them, and do not foresee the rental market declining (military town).

2.) Properties price: Staying between 40-70k provides the most cash flow, but building equity will be slow and cash-out refinancing could be an issue if needed in near term.

3.) I own my primary, a rental, and negotiating a 2nd rental; all with mortgages. The issue I am about to have is DTI exceeding 46% after this third house.

4.) Our rental was purchased three months ago so the banks won't consider the rental income. I have other income they also can't include, which, if included, would reduce our DTI to 30% even with this third mortgage. Should I consider a portfolio lender?

5.) Because I am purchasing at prices close to appraised value (homes still selling 50% or greater below bubble prices), I don't see how buying one cash (with private lending) would place me in a better position without the ability to refinance since DTI would still be at 46%. Would lenders not look at DTI the same since the house is already paid for or would that be irrelevant since a new mortgage would increase my DTI?

6.) A simple solution would be wait until the rental income can be used, but I don't want to wait when some great properties are available.

Finances:
I have a retirement account that is used to cover my reserves. Staying within our niche market I have enough to cover six-months on another 3-4 properties.

Homes purchased:
*Primary (short-sale) was purchased for $106,900 in 02/2012. PITI is $698.00 (30yr mortgage). Rental value is $1100-$1200/month.
*Rental (foreclosure) was purchased for $52,900 in 03/2013. PITI is $495 (15yr mortgage) and rental received is $750/monthly and was rented within 12 hours.
*Rental (short sale) being negotiated is $49k and expected rental income is $800/month.

Any thoughts would be greatly appreciated.
Thanks,
Luke