Private Lending & Conventional Mortgage Advice

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Jorge I. Pimentel
  • Rental Property Investor
  • San Diego, CA
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Ready to purchase, but currently stuck in the financing process.

Jorge I. Pimentel
  • Rental Property Investor
  • San Diego, CA
Posted Jan 20 2022, 15:41

Hello,

First and foremost, thank you for taking the time to read my post. I am a new investor in San Diego, CA. My brother and I currently own a SFR in Riverside, CA (fully paid) that we inherited and have been renting for around seven years. We are now looking to buy a multi-family property in San Diego or Riverside County.

However, we are currently in a unique situation. We have around 40k saved for the purchase, our credit is in decent shape (low 700s), however; our employment situation is holding us back. I quit my construction engineering job (currently unemployed) in October 2021 to start a trucking business (still in process). As for my brother, he quit his construction job back in mid-2020 and started doing construction projects on his own. He did not register his business so he only reported his W-2 income for that year. He received better tax advice now, and wants to report 2021 income as self-employed (net income 110k). This could help us for the purchase.

We visited a mortgage company and they gave us two options.

1) Re-do 2020 taxes and show proof of self-employment income (to comply with 2 year of employment history).

2) Purchase with a 20% down payment.

Our original plan was to purchase with a 3.5% FHA or 5% conventional. Our market is very expensive and we can not afford a 20% down payment. Any advice on what we could do? Are there any other alternative options for us or is what they told us the only way?We want to go shop to other mortgage companies for other options as well. I would definitely like all recommendations/advice you have for us. We definitely want to get started this year.

Again, truly appreciate you reading my post and look forward to your advice.

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