Can you make moves before having 2 years work history?

Question

Greetings all I am new here,

I'm 23 I left college 16 months ago and began working on the books In april 2020 at my current job. Currently I make 900-1000$ bring home weekly(variable income). This is going to be the first year filing taxes as prior to college I just worked cash jobs short term and never filed a tax return. I contacted a mortgage lender he said since I did not have 2 years work experience to show, the only potential option I had was to use my dad to buy the house as a Investment property with my name on the title. Once I had the necessary work experience we would have to then refinance the property into my name. For many reasons I decided not to take that route. Given what the mortgage lender told me . I'm looking to do a live in/ flip or a duplex house hack for my first primary residence. My first question is should I try other mortgage lenders to see if they have the same work history requirement or if there is any way around that in PA? Also given my situation where I'm at is it possible for me acquire an investment property if I find a deal and can find a hard money loan?

Griffin Schermer · Answer

I'd suggest shopping for other lenders. I was in the same boat not too long ago coming out of college. Some lenders require two years OR proof that you completed college. Some banks just want to hear you lay out a good business plan and show them your numbers on a deal. There's ways to navigate around lenders. I'd say trying to find a local lender is your best bet, at least that was my experience.

Joey Nugent · Answer

@Benjamin Aaker Appreciate your insight,

I work as a delivery driver for an italian restaurant. I know my title doesn't hold much weight but my income breakdown is 12$ hour 40 hours cash tips weekly 500-600$. I have only been in contact with the one mortgage lender so I definitely will start reaching out to other smaller banks to see if I have any possible options.

Joey Nugent · Answer

@Damaso Bautista Thanks for your reply.

Im not using my father because I wont be on the loan at all initially so I get not tax benefits. I would have to start funneling my money into my dad's bank account because I wouldn't be able to simply give him my money for the down payment. I would have to pay initial closing costs and then pay them a second time in less than a year when I would refinance in my name. Also I would be missing out on receiving first time home buyer incentives. I have about 25k to but towards a purchase.

Benjamin Aaker · Answer

Hi @Joey Nugent and welcome to BP!

Variable income you say? Is that commission based or are you an independent contractor? Banks don't like uncertainty so variable income is not great. You don't need 2 years of work experience for a W-2 job. The 2 years thing is a rule of thumb for those who are independent contractors or have some other source of income. Different banks have different criteria, though, so take the time to talk to a bunch of them. Smaller local banks will be better. A hard money lender will scrutinize you less, but the deal more. If you can find the right deal and lender then your personal background is not as important. Be prepared to finance with a bank ASAP as the rates you get with hard money are quite high and the whole loan comes due in a year or less usually.

Damaso Bautista · Answer

@Joey Nugent

Why aren't you using your dad?  You were unclear.

That is the best way for you to get your foot in the door in my opinion.

Other then that, find a place and ask them for seller financing assuming that you have enough money for a good enough down payment to make the seller feel good.

If you don't have that then I guess you are just going to have to wait.

Good luck!