San Diego · Member since 2019 · 18 posts · 7 votes
I'm a bartender making around 100k/year, I'm also a part-time construction worker. I've managed to save 400k and have 4 rentals that cashflow about 2k a month. My strategy has been B.R.R.R.R. so far and would love to continue with that. My bartending job takes up most my time working 5 days a week, I would love to quit so I can focus on real-estate. My concern is qualifying for loans with no W-2. Anyway around that? Thanks for your time!
Rental Property Investor · Dallas, TX · Member since 2019 · 24 posts · 8 votes
5y
We just quit our W2s and are using lenders who loan based on 'asset performance' - just like what @Jeff Langley mentioned. No income verification, it's just based on the asset and a good credit score. We found a few of our lenders via Facebook on our local investor group pages.
Rental Property Investor · Tacoma, WA · Member since 2021 · 4 posts · 1 vote
5y
Phil Pustejovsky has a YouTube video on exactly where you are and how to get financing. what every investor needs to know about loans….. wait for the dialog on “portfolio”. Not saying it’s the answer with all due respect to BP, just more learnings.
@Joshua Zdunich it's fairly simple, You'll want to find a DSCR(debt service income ratio) loan. There are lots out there and range from 4-7% rates depending On buy downs and a few other things but no W2 needed.
Developer · San Diego, CA · Member since 2014 · 93 posts · 87 votes
5y
Hey @Joshua Zdunich. Fellow San Diego resident and Indy investor. I do mostly new construction and flips currently, but have been in the Indy market for about 10 years and started with buy and holds. Feel free reach out. I would be happy to help where I can.
Rental Property Investor · Dallas, TX · Member since 2019 · 24 posts · 8 votes
5y
We just quit our W2s and are using lenders who loan based on 'asset performance' - just like what @Jeff Langley mentioned. No income verification, it's just based on the asset and a good credit score. We found a few of our lenders via Facebook on our local investor group pages.
Lender · Nashville TN - Licensed in AL AR DC FL GA LA MD TN, TX and VA · Member since 2021 · 583 posts · 338 votes
5y
You may be able to supplement W-2'd income with draws from your investment account (assuming that's where your $400k in assets resides). Your assets would need to be able to cover PITI for a 36 month period (i.e., ($400k minus $ to close)/36). I've been able to use this method for clients who quit their jobs before trying to buy, though this was for owner-occupied loans.
Rental Property Investor · Winston Salem, NC · Member since 2018 · 102 posts · 66 votes
5y
@Joshua Zdunich
Take it slowly and be sure you are well planned before walking away from your W2. I am at full retirement age and can still get great bank rates using my W2 income. Banks often use your net rental income after depreciation to calculate your DTI, not gross rental income. Thus if you leave your W2, you might need to use other types of money instead of the lowest and best bank rates you might otherwise be entitled to….so think that through before leaving your W2.
Here’s a thought… I am thinking about departing my W2 and setting up a separate self employed real estate business and a self directed ira. Then, you can borrow from your future self and pay interest to your future self. That is probably a plan I will execute and it sounds like it might work for you as well. Good luck!
Developer · Chicago IL · Member since 2019 · 150 posts · 125 votes
5y
@Joshua Zdunich I made myself an employee of my company, taking a reasonable salary. On top of that, I take shareholder distributions (K-1) disbursements throughout the year. This has satisfied all lenders except for a home loan. Traditional home lenders require three years of tax/income returns from the business because I own more than 50% of the company. There are other loans available which avoid the company financials as mentioned above. I highly recommend consulting with a good accountant.
Lender · Phoenix, AZ · Member since 2018 · 440 posts · 256 votes
5y
@Joshua Zdunich Agreed with the general consensus here. Some lender will also "asset deplete" where they'd take that $400k and divide it over 10 years. For those numbers, they'd count $3,333/mo as income. What I'd recommend is to get as much financing together while you still have that W2. Before my last big career change, I refinanced my property to a very specialized 1st position Heloc that's tied to a ZBA. That gave me 30 years of access to equity, and no true monthly mortgage payment. It maximized my flexibility, and lowered my DTI and regular expenses. That's an exciting time in your journey, congrats!