Does a W2 from your own corporation count?

Question

Hello BP!!

I always see comments and complaints about investors not receiving a standard job that they receive a W2 from. This of course makes it difficult to get conventional financing for their next deal.

I currently have a steady day job that I receive a W2 for. I have been there for almost 10 years now. I also have my photography business that is set up as a corporation. I started the corporation 5 years ago and have been paying my self as an employee (w2) for the past 2 years.

My question is, since I am the owner and employee, will banks not look at this as me having a steady job? I admit the amount I bring in is much less than the 9-5 job but I don't know how much longer I will stay there. I would love to max out my available mortgage limit (5 properties) but I think Ill be lucky if it get one!!

James Park · Answer

Yes,

J Scott is correct that you need to 2 years of tax returns. The lender will count both your W2 and your K1 (net profit) as your income.

Luka Milicevic · Answer

Don't under estimate having a W2 job with a respectable company. Lenders see that as a safe/steady income.

Having a full time job while doing real estate is NOT a bad thing and can have many advantages!

Brandon Heath · Answer

Thanks Everyone! (@Luka Milicevic @James  Park @J  Scott Shaun Weekes)

So looks like there will still be hope after I let go of the 9-5. I Would like to hold out until I at least have my first 2 properties, but we will see.

This would be for a conventional loan. Other than credit history and DTI ratio, what else have you all seen that can complicate being approved for the maximum amount of personal mortgages? I'm trying to gauge how fast or slow I would like to buy properties. maybe 1 a year for the next 5 years...... maybe 2 a year.

Brandon Heath · Answer

Thanks @Luka Milicevic

Ill try to hold on as long as possible, lol. Maybe even attempt to change departments rather then to quit  right away. Thanks

Luka Milicevic · Answer

I'm sure you can. It also depends on the actual lender, but like most everyone said; you will more than likely need tax returns for your business and personal returns as support. In addition, the lender will require a tax return transcript.

J Scott · Answer

Yes, you can use it, but you'll likely need 2 years of tax returns for your self-employed income for it to count (if you're trying to get a conventional loan).

Scot Howat · Answer

You can use it.

Shaun Weekes · Answer

On top of that answer you, can also go up to 10 mortgaged properties.

I hope this all helps and have a good one.

Brandon Heath · Answer

Thanks for the reply @Charlie Fitzgerald.

That's great news! I thought I would have to juggle the both of these forever. Totally understand that I will have to have my paper work inline.

Charlie Fitzgerald · Answer

Yes. You can use it.  But you will also need additional documents (business tax returns, P&L statement) etc.

Does a W2 from your own corporation count?

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