Getting a mortgage for investment property as a 1099 employee

1 Reply

Hello,

I had a question in regards to getting approved for a mortgage for an investment property. I've been wholesaling for a short time now, and what I'd really like to do is use that money as down payments on cash flow rental investment properties.

The problem I foresee is actually being approved for a mortgage, as I am a 1099 employee with two years of "inconsistent" income.

Does anyone have some insight on this? Thanks in advance for any help!

Originally posted by @Richard Scheuermann :

Hello,

I had a question in regards to getting approved for a mortgage for an investment property. I've been wholesaling for a short time now, and what I'd really like to do is use that money as down payments on cash flow rental investment properties.

The problem I foresee is actually being approved for a mortgage, as I am a 1099 employee with two years of "inconsistent" income.

Does anyone have some insight on this? Thanks in advance for any help!

 Hi Richard,

Per the tax code, you're not an employee with an employer. You're a contractor with a client. 

There is no rule that says contractors cannot get mortgages, or all the real estate agents would (ironically) be homeless. :)

Normal 30YF mortgages you see advertised everywhere will, however, be based on your tax returns.

There are non-Agency cashflow-based portfolio mortgage products that focus on the cashflow of the subject property and not your personal income docs. These are better than hard money. Expect the rate to  be a tad higher than the returns on a Wall Street index fund (why else would they lend you the money & not invest it in Wall Street?), so it's got to be a slightly better deal, in terms of sticker price to rent ratio, to still cashflow. But, hey, you're a wholesaler so that's your specialty. :)

Once your tax returns support your income, you could refinance the portfolio loan into a normal 30YF. Note that you do not HAVE to wait until the last minute in 2018 to do your 2017 taxes, you can file in January if you wish.

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