Need ideas for financing for my self employed daughter
Melbourne, FL · Member since 2014 · 3 posts · 5 votes
Need ideas for financing for my self employed daughter
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Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1yCouple ways to potentially tackle this. For Conventional, if he previously worked in the same industry, makes approximately the same (net) as he made while working as an employee, and has at least 12 months of SE history on his 2024 tax return, he may be able to squeak by.
There are also bank statements loans as long as he has at least 10% down (20% is much better) and good credit. These will use the cashflow in his bank statements rather than his tax returns to determine qualifying income. Typically, between 1 and 2 years of SE history is doable with these, but less than 12 months is not.
Last option is to seller finance and then sell some or all of the note(s). There are a lot of nuances to how this is set up, and you will take some amount of a discount on the value of your note(s) when selling, but you could sell some or all of the note(s) within 6 months to a year to convert them to cash. The value of a note is determined by a lot of factors, so you'll want to partner with someone with expertise to set it to bring the most value. This is not something to DIY.
12 Replies
- 1yRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
@Robert Smith I know of a few options here in Florida that offer financing to individuals that have been self-employed for less than 2 years, but must be 1 year or greater, in order for it to work. Feel free to contact me. My info is in my signature.
Helm Mortgage Corp.5127 Reviews - Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Couple ways to potentially tackle this. For Conventional, if he previously worked in the same industry, makes approximately the same (net) as he made while working as an employee, and has at least 12 months of SE history on his 2024 tax return, he may be able to squeak by.
There are also bank statements loans as long as he has at least 10% down (20% is much better) and good credit. These will use the cashflow in his bank statements rather than his tax returns to determine qualifying income. Typically, between 1 and 2 years of SE history is doable with these, but less than 12 months is not.
Last option is to seller finance and then sell some or all of the note(s). There are a lot of nuances to how this is set up, and you will take some amount of a discount on the value of your note(s) when selling, but you could sell some or all of the note(s) within 6 months to a year to convert them to cash. The value of a note is determined by a lot of factors, so you'll want to partner with someone with expertise to set it to bring the most value. This is not something to DIY.
- Melbourne, FL · Member since 2014 · 3 posts · 5 votes1yI think this is the first option I want to pursue, but I have no experience with owner financing or selling the note down the line. As for enlisting a professional for help here, should I just do a broad search for 'real estate attorney' in my area?
Quote from @Patrick Roberts:
Last option is to seller finance and then sell some or all of the note(s). There are a lot of nuances to how this is set up, and you will take some amount of a discount on the value of your note(s) when selling, but you could sell some or all of the note(s) within 6 months to a year to convert them to cash. The value of a note is determined by a lot of factors, so you'll want to partner with someone with expertise to set it to bring the most value. This is not something to DIY.
And when it comes time to sell the note, any suggestions on how to start that process and find a 'buyer'?
Thanks for your time and help
- 1yDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
Quote from @Robert Smith:
I currently own a 3bd 2ba house in Cocoa, Fl. I have been renting it to her and her boyfriend for a couple of years. For many reasons, I need to sell it to them outright, but the boyfriend is self employed (construction/concrete) and the current business has only been running for a year. (Approx 400k in income)
I need some ideas for any places that specialize in these types of loans. Or even private money that would be interested in something like this - realizing that interest rates will be higher.
Or if there is some creative option I havent thought of.
Any help is appreciated.Hey Robert, local to you here in FL. I have a few recommendations that would be a great fit. Happy to connect!
ProAlpha Capital56 Reviews - Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes1y
Quote from @Robert Smith:
I currently own a 3bd 2ba house in Cocoa, Fl. I have been renting it to her and her boyfriend for a couple of years. For many reasons, I need to sell it to them outright, but the boyfriend is self employed (construction/concrete) and the current business has only been running for a year. (Approx 400k in income)
I need some ideas for any places that specialize in these types of loans. Or even private money that would be interested in something like this - realizing that interest rates will be higher.
Or if there is some creative option I havent thought of.
Any help is appreciated.One route Robert is to use a bank statement product for the boyfriend to help qualify with your daughter on the purchase agreement.
A more strategica way to do it is if they've leased from you for over 12 months is to do a lease + option contract to buy. This gives them optionality but not obligation to purchase however the advantage if the property appraises sufficiently, they could purchase the property from you with as low as 0% down, you could give them rental credits towards their closing or down payment which could make it truely a zero cash out of pocket affair. This option takes a bit more of planning and documentation (documenting the 12 months of rents received).
The other option is if the boyfriend has been in the industry for 2+ years and has atleast 1 year of filed tax returns we could utilize his income on a full doc conventional loan as well. This does require us to document hes been in the industry for more than 2 years (IE business license, trade license, or other documentation) with 1 year of tax returns with sufficient income to qualify.
Lastly if hes been in the industry for 2+ years ( like W2 employee prior and Self employed for 1 year) he could potentially utilize bank statement loan programs as well to qualify to purchase from you.
There are many ways other than waiting for a full year through 2025 and filing 2025 taxes before you can qualify, however this option works too.
- Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes1y
Nobody has mentioned one big point, BOYFRIEND. It is NOT her husband. What if they break up? What if he runs off and leaves her with the payment, but not clear title??
Sell it to your daughter only. The boyfriend can pay rent as a tenant. She can use most of the rent as income to qualify. If he goes away, she can find another tenant/roommate.
Just another perspective for you.
- Melbourne, FL · Member since 2014 · 3 posts · 5 votes1y
Quote from @Rick Pozos:
Nobody has mentioned one big point, BOYFRIEND. It is NOT her husband. What if they break up? What if he runs off and leaves her with the payment, but not clear title??
Sell it to your daughter only. The boyfriend can pay rent as a tenant. She can use most of the rent as income to qualify. If he goes away, she can find another tenant/roommate.
Just another perspective for you.
This is a VERY valid concern in this process unfortunately. I will probably follow this advice.
I appreciate your answer.
- Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes1y
Quote from @Robert Smith:
Quote from @Rick Pozos:
Nobody has mentioned one big point, BOYFRIEND. It is NOT her husband. What if they break up? What if he runs off and leaves her with the payment, but not clear title??
Sell it to your daughter only. The boyfriend can pay rent as a tenant. She can use most of the rent as income to qualify. If he goes away, she can find another tenant/roommate.
Just another perspective for you.
This is a VERY valid concern in this process unfortunately. I will probably follow this advice.
I appreciate your answer.
Also remember that if she lives with him, the boyfriend, that the BF's rent each month is considered boarder income or room mate income and cannot be used. However, if the Boyfriend pays rent and she moves out entirely and he has a proper lease agreement signed to her as an owner, then that rental income can be used to offset the monthly mortgage payment and help her qualify for another property from a "lending perspective."
This may matter she she wants furture flexibility of buying more properties and not getting stuck to just one property in her RE investing career.
It may also be beneficial if she doesnt want to get bogged down with a partnership or legal battle over the property by following Rick's advice of only keeping the boyfriend as a legal tenant versus having him on title.
Best of Luck -
- Lender · Colorado Springs, CO · Member since 2025 · 48 posts · 30 votes1y
Hey Robert,
For your situation, you might want to look into credit card stacking. This involves using personal credit cards to access funding quickly by liquidating the available credit. It’s a flexible option, especially if you’re looking for faster capital.
Additionally, private money lenders or hard money lenders often specialize in unique financing scenarios like yours, though interest rates may be higher.
Let me know if you’d like more info on either option!
Best,
Virgil M.
- Lender · Member since 2024 · 19 posts · 8 votes1y
Hey Robert, It is possible our team can approve with 12-24 months of self-employment history, as long as they have a full year of business tax returns (not a partial year). They’d also need a few other factors working in their favor—like a prior W-2 job in the same field with similar income. But yeah, while the standard rule is two years, there are cases where lenders will work with 12-24 months.
Couple other options
1. Seller financing – If they can’t qualify for a loan yet, you could finance the sale yourself for a few years until they can refinance.
2. Co-signer- or partnering – If she has strong W-2 income, she could apply alone and rent to her partner or with a co-signer to help with approval.
- Member since 2025 · 77 posts · 15 votes1y
Getting a mortgage for a self-employed borrower with only one year in business can be tough, but there are options:
✅ Bank Statement Loans – If his business is bringing in $400K, some lenders allow 12-24 months of bank statements instead of tax returns.
✅ DSCR Loan – If this will be a rental property, he may qualify for a Debt Service Coverage Ratio (DSCR) loan, which bases approval on rental income instead of personal income.
✅ Seller Financing – If you’re open to structuring a seller-financed deal, it could provide flexibility while he builds more financial history.It’s worth exploring non-QM lenders that specialize in self-employed borrowers for the best fit!
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