Lender financing without a W2

9 Replies

Hello, I'm considering starting a new commission-based job. In the two years it would take to establish my income substantiation, is the a path to getting BRRRR properties refinanced?

- partnering and putting it under partner’s name?

- having a co-signer?

- other?

Thank you!

Hi Matt - this is a great question, although somewhat difficult to answer without having all the details. If you're a commission-based employee now and you're moving to a new commission based job in the same line of work, you'd likely be fine since you have the 2 year history of receiving commission income in your field. If you don't have a history of receiving commission pay in your current job and are moving to a commission role, then you'll likely need to establish the two year history. 

The other options (as you eluded to already), are to add a co-signer, co-borrower, or document other sources of income to help you qualify. 

Will the new job be 100%commission or will there be a base salary? Any kind of guaranteed commission (E.g. you won't make less than "x,xxx")? 

Originally posted by @Seth Wilcock:

Hi Matt - this is a great question, although somewhat difficult to answer without having all the details. If you're a commission-based employee now and you're moving to a new commission based job in the same line of work, you'd likely be fine since you have the 2 year history of receiving commission income in your field. If you don't have a history of receiving commission pay in your current job and are moving to a commission role, then you'll likely need to establish the two year history. 

The other options (as you eluded to already), are to add a co-signer, co-borrower, or document other sources of income to help you qualify. 

Will the new job be 100%commission or will there be a base salary? Any kind of guaranteed commission (E.g. you won't make less than "x,xxx")? 

Thank you Seth!  I appreciate your reply.  The details would be leaving corporate W2 job (no commission) and going to a 100% commission job. In theory, there could be a happy medium in which there is a base salary of half my current (making this part up, as it is not certain).

If it was part base, part commission, would that keep me lendable, just with lower limits?

Thanks again.

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Hi Matt - If you have a stable base salary + commission, lenders would be able to use the base salary part of your pay to qualify. 

@Matt Ferch - You can also look at lenders that loan based on the property and not the borrower.  The investor friendly lenders I used to grow my portfolio to its current size don't require tax returns or W2s and have no problem lending to LLCs.  They are out there, just have to do some digging to find the legitimate ones.  Their rates are a point or two higher depending on your credit score but if it's a matter of building a rental portfolio or not...if the numbers work, it's a no brainer.

Originally posted by @Salvatore Lentini:

@Matt Ferch - You can also look at lenders that loan based on the property and not the borrower.  The investor friendly lenders I used to grow my portfolio to its current size don't require tax returns or W2s and have no problem lending to LLCs.  They are out there, just have to do some digging to find the legitimate ones.  Their rates are a point or two higher depending on your credit score but if it's a matter of building a rental portfolio or not...if the numbers work, it's a no brainer.

Thank you Salvatore! I appreciate your feedback. Were these commercial loans through local banks?  15 or 20 year terms?  Thanks!

Originally posted by @Salvatore Lentini:

Hi @Matt Ferch - some regional, some national but they are not traditional banks with branches.  Online, Wall Street funded lenders.  Terms anywhere from 12 months to 30 years.

Thank you Salvatore!

@Matt Ferch

There are portfolio programs that go based on the cash flow of the property and don’t look at your finances. They will have loan minimums of $75k to $100k depending on the lender.