Can't qualify for a loan but have the money

22 Replies

I am a 19 year old who lives in Columbus, Ohio. I have my own landscaping company and have accumulated some money that I want to invest somewhere and make it grow. I would like to buy a multi-family property with an FHA loan and rent out the other side and live for free. I have not yet made my business an LLC so for the last 5 years everything I have been paid was "under the table." With that being said, I have no work history technically. Therefore, I cannot qualify for a loan. No one will co-sign with me since it will be my first investment property and I'm still learning. I've watched hundreds of YouTube's and podcasts and just read "Rich Dad Poor Dad" and "Rental Property Investing." I continue to do more research every day. I feel I have a good understanding of the rental property game and the money to get into it but no way to get a loan. Any suggestions?

How much money, exactly, do you have?  In some cases, a person with assets but no job can still get a loan using the trust-assets-as-income loan structure.  You've heard of a "trust fund baby?"  With enough money, you can turn yourself into a trust fund baby.  This loan structure may not fit you now, but keep it in mind.  It works like this:

Create a simple Revocable Living Trust (RLT).  (I always do this for my borrower; no need for an attorney.)  Prepare a Trustee Letter that assigns the asset account to the RLT.  The RLT now owns the asset account.  Divide the amount of money in the RLT by 36 months and voila!--there's your qualifying monthly income.   Works with conforming and jumbo loans, too.

Catherine Coy

Loan Originator

Shore Capital Corporation

Have you filed tax returns the last several years? If not, maybe an owner-finance would be a good fit. Work you sphere of influence and see if there is anyone (tired landlord?) with a paid off property that likes the cash flow but hates the headache of maintenace and tenants.

<< You can use a DSCR [debt service coverage ratio] loan that qualifies you based on the rental income of the property. >>

To qualify for a DSCR loan, most lenders require that you own a primary residence.

Originally posted by @Brian Wilson :

I am a 19 year old who lives in Columbus, Ohio. I have my own landscaping company and have accumulated some money that I want to invest somewhere and make it grow. I would like to buy a multi-family property with an FHA loan and rent out the other side and live for free. I have not yet made my business an LLC so for the last 5 years everything I have been paid was "under the table." With that being said, I have no work history technically. Therefore, I cannot qualify for a loan. No one will co-sign with me since it will be my first investment property and I'm still learning. I've watched hundreds of YouTube's and podcasts and just read "Rich Dad Poor Dad" and "Rental Property Investing." I continue to do more research every day. I feel I have a good understanding of the rental property game and the money to get into it but no way to get a loan. Any suggestions?

 I recommend you go out and find a really good deal here in Columbus, Ohio. If you do that then the partners will come with the money. That is what I did when I started my 1099 job and was not lendable.

<< You can attempt to get a 'bank statement' loan, based on the money that has run through your account for the past year....couple this with a DSCR loan perhaps... >>

The two loan programs can't be combined.

@Brian Wilson

If the property has a lot of equity ask about owner financing. If there isnt a lot of equity look into taking the loan over subject to. Even if there is a lot of equity you could still do sub-to but you would need more cash in the deal. You could also look for a hard money lender for the difference.

@Brian Wilson you could explore utilizing creative financing options such as seller financing, lease options or partner with someone who can qualify for a loan while you provide the capital for the down payment/closing costs. It can’t hurt to reach out on BiggerPockets to see if anyone on the forums is looking to partner on deals in the area you’re interested in investing in

Honestly? get out of the shadow economy and start putting everything "on the books" You can refile for the last 2 years taxes so you have a tax history- this will allow you to get a loan. you do NOT need an LLC to buy a house LLCs make buying a pain... just get good insurance (you should have insurance now for your biz so just ask your ins broker what you need) . The whole LLC thing must of been thought up by a lawyer ;) (adding you might consider a LLC for your landscaping biz if you hire help)

You are young, do NOT get a hard money loan...  do not get into some complicated situation where is one thing goes wrong you will loose it all...     

Originally posted by @Rob Golob:

Funny no one has mentioned the problems with tax evasion.

That was my first thought on reading the OP.

@Brian Wilson
My first suggestion is to delete this post. You have admitted to tax evasion in a public forum. Not smart.
Next, work on your ethics. You are still a teenager, and that's a time for mistakes - we've all been there. Learn from those mistakes. Think about the kind of businessman you want to be. Do you want a reputation as an honest, trustworthy person, or are you just concerned about making money without considering anyone else? Set a standard for yourself, and then measure your actions against that standard.

Brian, look for hard money lenders. they usually look at the property more so than the investor. 

once you own the asset for several months and can show income from the asset you might be able to refi..

@Brian Wilson

I would listen to Pace Morby on YouTube. The guys a genius with creative financing. All sellers think they want all cash offers, your job is to convince them they really don't. If someone is wanting to get 100k for a property and an "all cash" buyer comes in at 100k. The seller initially thinks how cool it is that they got asking for the property. But after closing cost, title fees, and waiting around for inspections, appraisal, etc. They may come out with only 85k.

You offer them the 100k but then tell them instead of paying closing costs and going through a buyer with a bank, they become they bank, get a good down payment, collect interest for however long you set your balloon payment, don't pay closing costs, and don't pay on the big capital gains taxes right away.

They now have there asking price of 100k earning them money with the interest, don't have to pay big taxes on the money they earn, and will probably end up getting over 115k depending on when you pay off the balloon.

Everyone wins!

If it's a subject to deal then you can take over their existing loan and improve their credit while they also get paid for the sale of the property.

I double checked my investors guidelines. You must have proof that you are self employed as the bank statement loan are only for the self-employed.

You can do a bank statement loan on Primary / Second Home / Investment property of 1-4 unit. Bank statements are either 12 or 24 month of either personal or business bank statements. The reason you can go 24 month is that it could give you a higher average than the last 12 months, so you decide. 

If you use personal bank statements then they will average 100% of all your normal deposits and divide that by 12 or 24 months to determine your monthly/annual income. If it is business bank statements, they will average 50% of all deposits and divide by 12 or 24 months to determine your income.

You can do this loan today, so long as you ran the money through your bank accounts. Mattress money will not fly!!! 

I hope this helps?

Brian Wilson, try this...

At Silver Hill Funding, LLC, you can take advantage of our No Doc Streamline Program to lock in deals for your non-bankable clients.

It's the ideal solution for those borrowers who can't provide tax return documentation. Instead of reviewing tax returns or bank statements, our team will simply focus on the FICO, LTV, and 3rd party consumer credit information to approve your best-credit commercial clients.

Here’s a quick look at our guidelines:

  • Loans from $100,000 - $2 million
  • Terms: 5-Year ARM or 30-Year Fixed
  • Purpose: Purchase, Cash-Out, R/T Refi
  • Documentation: No tax returns, bank statements, or operating statements*
  • Occupancy: Investor & Owner-Occupied
  • Max LTV: 75%
  • Min. FICO: 700
  • Min. DSCR: 1.0x


Go online and find your nearest Silver Hill Funding office.  It's wholesale only, so they'll refer you to a loan originator in your area.