What to do when you have excellent credit but cannot show income.

14 Replies

I have four properties, two in NYC and two in GA (one is my home and one is self-directed IRA). Collectively, they're worth $1.3 million, all paid in full. But, I recently left my job to do consulting and I have less than a year as an entrepreneur. Hence, I cannot show income or qualify for an investment mortgage. What do I do, given that I want to continue to buy properties for passive income? I've looked at hard money no doc loans. but 1.) seems a shame to go that route when I have so much equity and credit score of 830 and 2.) it's EXPENSIVE and leaves little room for profit. Any ideas?

@Glenn Martin I think your best option is finding a partner that is able to qualify for conventional loans and you can leverage your Existing Equity.
Originally posted by @Glenn Martin :

I have four properties, two in NYC and two in GA (one is my home and one is self-directed IRA). Collectively, they're worth $1.3 million, all paid in full. But, I recently left my job to do consulting and I have less than a year as an entrepreneur. Hence, I cannot show income or qualify for an investment mortgage. What do I do, given that I want to continue to buy properties for passive income? I've looked at hard money no doc loans. but 1.) seems a shame to go that route when I have so much equity and credit score of 830 and 2.) it's EXPENSIVE and leaves little room for profit. Any ideas?

If your net monthly positive cashflow is 2.5x your personal housing expense plus all other non-mortgage consumer monthly debt obligations, and you are buying cashflow positive real estate, you can get a normal Fannie loan. Gotta find that 1 in 100 loan originators that'll actually review your paperwork and do the math to confirm; most will laugh at you right before hanging up. Your local REIA might be a good resource to find that LO.

Partnering up with someone who could take a conventional loan is not a bad idea. The other option is to do a non agency product, such 12 months average bank deposits or asset depletion or DSC (debt service concerage) where 90% of the rent covers your total monthly payment 

@Ayne C. I’m in THE same boat as you. 1099 in a year with THE 800 cREDIT SCORE. I had one bank look at my finances but ended up not qualified. I asked for a review and even a HELOC, but, the HELOC goes through the same review process. I’m debating on finding a deal where owner finances or acquiring a hard money lender.

You can get a high equity line of credit (HELOC) using your existing properties as collateral. That will free up plenty of cash to qualify for another loan or three.

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