Financing questions for newbies

[Valerie Lane]

Hey there,

so my husband was essentially forced to step away from his job of 17 years and we're using it as a catapult to dive into real estate development and investing. I own my own architecture firm but have, on paper, generally kept my profits pretty low for tax reasons. We have some start up capital, roughly 100k liquid and about 100k total equity in our home (so 70-75k theu HELOC or cash out refi). My questions are;

1) with the sudden absence of W2 income for my husband and nowhere near enough through my business, is it possible to obtain a conventional loan to purchase our first property?  
2) Will or can they look at the cash flow from the rental opportunity as income to make up for the gap in my husbands 9-5 income?  Or would we be better off bringing in a partner with the income/credit to qualify?

3)Can anyone share experience with how to start and develop relationships with banks/local lenders?  My plan was to just start calling and scheduling appointments with managers in my area and introducing myself and putting my vision out there to see who is receptive or may be willing to get on board.  This would be a non specific meeting just to get my name in their mouth and see what they offer.  Should I bring a business plan?  Some example pro formas? Tax records?  Or just casual, off the cuff with a nice little elevator pitch?

Thanks for any input

[Kerry Baird]

DSCR mortgages might be available. They are based upon the income of the property.

I also called all the lenders in my community and asked about their appetite for lending. I created a big spreadsheet, and find lending data goes stale every few months as rates and terms change.  Some don't want to deal with investment properties, while others are community banks that want to grow investment in the local area.  Good idea to ask around.

If you keep going forward, you can move from one house, stay a year and force equity, move out and rent that one out, while you look for another.  You get the best rates and low downpayments that way.