Finding financing as an “under the table” employee

5 Replies

Hi bigger pockets! I am new to REI and wondering what options I have to receive financing as an "under the table" employee of the cannabis industry on the west coast? Working for cash is very common in this industry and I haven't been in the books for a couple of years. Thank you for taking the time to read!

You will have a tough time, not to mention the IRS would like to have a word with you for tax evasion, pay your taxes like a law abiding citizen then you'll have the tax returns to show lenders and get financing, it is probably going to be a couple years before you can get financing with a conventional lender, maybe sooner if you decide to amend your previous returns and pay the money you actually owe the government.

Conventional = definitely no. 

If you found a great deal then I would suggest looking into a no doc loan, but keep in mind you'll pay a significantly higher interest rate and probably a couple points on top.

Best of luck

@Joshua Ward

You're not an under the table cannabis worker, you're a real estate professional.  :)

Go with a DSCR loan that doesn't care about your income taxes. Non owner occupied of course.

Stephanie

So it would depend on how you show income as well as what your financing goal is. 

Do you get paid cash under the table with absolutely no W2 or 1099 given from your employer?

Do you claim all of those funds on your taxes or just a portion of them or any at all?

Are you looking to get financing for a flip or a rental? 

Are you looking to get the best financing possible or just get financing that you qualify for in order to get started?

If you do not show any income at all, or a smaller amount due to how you do your taxes than conventional financing is likely out the window as they will need proof of income and if you are not claiming anything or claiming a significantly lower amount than the actual amount you would likely not show enough income to purchase using conventional financing. 

If you are looking to get started than you would be able to look at hard money for flips and NON-QM/Commercial lenders for rentals as they will base their qualifications more so off the property and if it will make money vs you and your ability to pay the mortgage payment. 

You do have a few options it's just a matter of knowing exactly what you are looking to accomplish and finding lenders that will work with that scenario. 

I hope this makes sense and helps.