I have a few questions for people more experienced than me, but before I ask them, I should give some relevant background information.
I'm a recent college graduate (22) looking to buy my first owner-occupied rental property in Michigan. I have been working for a local real estate investor/builder, and in the last five months I have been helping him build a 6 bedroom rental house, and am learning as much as I can about the industry and how these properties are renovated and managed.
My grandmother took an interest in what I am trying to do, and has loaned me $55,000 (in addition to $7,000 I have saved of my own money) to buy a home that needs repair (work I am learning how to do myself). I would like to live in it, rent out the other bedrooms, and cash-out refinance as soon as possible, but buy and hold long term. In the area I am looking at, the lowest prices for houses are around $300,000. (I know, expensive, but the most promising market)
The mortgage broker I am working with to buy the property is asking for 50% DTI, and my grandmother is willing to cosign, but she has too many personal debts for it to get down to 50%. I have no personal debt or expenses (living with parents), but the broker will not accept my current personal income working under this investor until I have worked another seven months, even with a proof of employment letter. I have met with many bankers and they have all said the same thing. So, as disappointing as it is, I don't think I'll be able to get the financing for the property before June 2020.
My question is, how can I best spend my time in the next 7 months? I am trying to learn all I can (both hands on and reading books) about the things I will be doing once I get this property and I have been told I should get a residential builders license and real estate license during this time, for learning purposes, but also for potential higher income opportunities in the future.
Any suggestions and knowledge are greatly appreciated on what I should be doing, and if anyone knows of something else I can try for getting financing earlier, I am all ears!
Thanks for the help,
@Mark Middleton you might be better off just using hard/private money in addition to the money you have now to purchase/rehab the place then do the cash out refi. That way you can avoid paying closing costs twice so that makes up for the higher interest rate you'd have to pay going that route. There are also more unconventional lenders popping up out there that will lend based on bank statements or stated income but those rates will be closer to 8%. You could also think about finding a partner that is lendable.