Home Mortgage/Loan Scenarios... How is this possible?

[Wayne Petit]

I'm sure someone has asked this question before but I can't seem to find an answer. I often read this scenario on BP or other real estate posts about buying/financing rental homes. The assumption is if a person has $100K to spend they could theoretically but 4-5 houses (costing around $100K each) since they could put down 20% on home and finance the remaining 80%. But I never see anyone address the fact of how do they get Financed for the loan without having the income to carry those other mortgages? I've read so many examples of people stating as long as you have the 20% you automatically can by the home. I used to be a Mortgage lender and it doesn't work that way in the real world. The borrower needs to show sufficient income to carry all those loans + PITI. I understand that if they get a rental lease on one of the homes they can declare most of that as income for the next loan they get, but you still have to show enough income to carry the first loan and your personal home mortgage (if you have one). You have to buy the home first (then possibly rehab) and then find a tenant.

Am I missing something here?   Is there some technique or finance trick that would allow someone to purchase multiple homes at once if they just the 20% down?   Is there a way to declare some of the rental income before you buy the house.. if you had a interested tenant who would sign a lease ahead of time?

Thanks for the advice.....