Do I need a full-time job?

Question

Hello everyone!

My name is Jamila. I am 23 and I graduated from college with a degree in civil engineering. I have been working at a NYC engineering firm for over a year. I will be going back to school full-time to get my master's in construction (as fast as possible). On the side, I have an e-commerce business that made over $50,000 last year and over $50,000 for the first 6 months of this year, so financially I am stable.

I would love to invest in a multifamily either later this year or early next year. My worry is that I would not qualify for a loan because I do not have a full-time job. Is this always the case? What other factors do they look for? With my side gig, I also have my own LLC. Is this beneficial in my case? I need to learn more information on having an LLC in real estate investing, but from my knowledge, I could build my business credit and use that as a driving factor in my eligibility? Please correct me if I am wrong.

For reference, I plan to invest in the Newark, NJ area.

Thank you!

Jenni Ellis · Answer

Being self employed has its pros and cons. In this case, not having a proven track record is one of them. Most banks will want to see at least two years of financial returns from your e-commerce company before they consider that as your income. If you don't want to wait for the full two years, you could bring someone in on the deal with you as your financing solution.

If you purchase a property in an LLC, you will still need to show financials and that you have a proven track record. In most cases, that is showing your personal financials.

JonLina BonJoey · Answer

Hey Jamila!

Most banks will not look favorably on a business that is "younger" than 2 years old. However, there is always the option of raising money. A full time job in my opinion is only beneficial if it helps toward your end goal, if there are some perks that your job could give you that would give you a LEGAL edge in knowledge or opportunity, then it might be worth it. But for most ppl, its just a life-sucker that only is an incredible source of stress.