Self employed, several business... Low reported income.

[Kevin Richard]

I found an amazing deal (if anyone is paying attention, the cash deal ppl screwed up and I'm signing a buyer/seller agreement tomorrow!)

It's $172k as-is for a house that needs int/ext paint and 3/4 of the roofreshingled and it would be worth 225-250 easy! 2085 sqft 4 bed, 2 bath in a killer area.

Problem is that I've been self employed forever and though my businesses gross a fair amount (130k, 80k, 100k a year, as well as 47k a year in rental income and I'll rent out current place for 900/month ) but in the end I only take a draw of $3k/month and after CPA is done with taxes I'm at 20k/year n my returns.  And my fico took a stupid ding because the CPA filed my taxes that said I owed 6k and between that and filing the payment plan, they slapped a lien on me for like 2 months... From 750 to 690 :( with that being the only ding. 

I owe about 80k on my current mortgage (cost me 578/month), cars are owned outright, one rental property is used as collateral for a 25k line of credit, another comercial rental property is owned by an llc of mine that is owner financed for like 280k (2200/month),  15k on discover card, 4k on another card, 4k and another card.

Over half a million in assets counting all the properties and equipment in the businesses.

What are your guys thoughts? 

[Michael S.]

@ kevin Richard

Not all lenders are the same.  I have found lenders with "in-house" funding to be the most flexible. You may also contact mortgage brokers who can choose from a variety of lenders.  After mortgages 1-3, it took me a while to find a lender to work with my self-employed situation.

I'm going to be very honest with you. There are some red flags in the situation you described. Tip #1: You need to have more cash in reserve for unexpected emergencies/repairs. Credit cards can serve for those emergency repairs though it is unwise to carry a balance if it can be avoided. Your credit card balance of 24K needs to be dealt with before acquiring more or at least put under the LLC. A credit card balance in an LLC has little effect on your credit score while credit card balances in your name will have a direct impact on your credit score.

A fast nickel beats a slow dime, so in this case, if you have a good deal with the 175K home you should try to extend the closing date (to give yourself some time) and flip the deal to another investor before the close of escrow. Otherwise you face acquisition costs, holding costs, as well as renovation costs, it adds up quickly.

Good luck!   

@Kevin Richardundefined