Unstable employment history - any recourse on getting a loan?

7 Replies

Hi all,

I'm a mid-20s guy looking to diversify into real estate. Right now I have about 125k invested in vanguard with about 80k of that liquid (taxable mutual funds), and about 10k in a plain checking account. 

I've been wanting to buy a duplex for a while, live in 1 unit and rent out the other. I'm unsure if I'll be able to get a loan, tho, because my employment history isn't great.

I had a great job out of college, but it was a volatile industry and I was laid off after 1 year. It took me 8 months to find another job in the same industry, from which I was then laid off from again a year later.

After that, I switched industries, but absolutely hated my job. I left after 7 months, thought I had another job lined up, didn't get it. Queue another 6 months of unemployment, until I got my current job. So far I like it, I'm doing well, and the company is very solid. Unfortunately, I've only been on the job for four months. 

So, really bad employment history, but I'm finally stabilizing it. I'm very financially secure with ~135k in total assets, no debts of any kind, and very cheap monthly bills ($350 rent, company pays for most meals, 100% free insurance, and free car/gas/insurance). My credit rating is ~792-800, depending on credit agency.

Will any of this help offset my bad history of employment, or am I SOL for now? I'm looking at duplexes in the 80-150k range.

Any advice on obtaining a loan would be helpful. I'm willing to put down more than 20%, but I don't want to buy outright as leveraging my cash is a big draw for me regarding real estate. 

Thanks

I'm working in financial field, were i get loans for people to purchase vehicles, i believe it works same way on homes too.

Here is few questions for you. Have you ever had any loans in a past, car loan, credit card, etc? What price range property you looking to buy? How much would you put down? 

I would highly recommend you to open checking account with local credit union, and also explain them your situation you are in right now. 

My girlfriend was in similar situation you are and she went to local CU and open checking account, and 3-4 months later she got loan on her condo.  

Good luck!

Originally posted by @Ernie V. :

I'm working in financial field, were i get loans for people to purchase vehicles, i believe it works same way on homes too.

Here is few questions for you. Have you ever had any loans in a past, car loan, credit card, etc? What price range property you looking to buy? How much would you put down? 

I would highly recommend you to open checking account with local credit union, and also explain them your situation you are in right now. 

My girlfriend was in similar situation you are and she went to local CU and open checking account, and 3-4 months later she got loan on her condo.  

Good luck!

 Hey, thanks for the response. I've never had a loan for a car, house, etc. I have a pretty good amount of credit card history (~8 years, ~1.5k/mo for the past few years). Zero late payments, missed payments, etc, so my credit score is around 800.

80-150k properties. The ~85k properties I'm seeing I could almost outright buy, but I want to leverage my cash and not tie all of it up in a house. I'm hoping to put down 20%, but I would be willing to put down upwards of ~50% if necessary. I'll definitely look into local credit unions and see if there's anything worth pursuing, thanks for the idea.

Originally posted by @Adam Gardner :
Originally posted by @Ernie V.:

I'm working in financial field, were i get loans for people to purchase vehicles, i believe it works same way on homes too.

Here is few questions for you. Have you ever had any loans in a past, car loan, credit card, etc? What price range property you looking to buy? How much would you put down? 

I would highly recommend you to open checking account with local credit union, and also explain them your situation you are in right now. 

My girlfriend was in similar situation you are and she went to local CU and open checking account, and 3-4 months later she got loan on her condo.  

Good luck!

 Hey, thanks for the response. I've never had a loan for a car, house, etc. I have a pretty good amount of credit card history (~8 years, ~1.5k/mo for the past few years). Zero late payments, missed payments, etc, so my credit score is around 800.

80-150k properties. The ~85k properties I'm seeing I could almost outright buy, but I want to leverage my cash and not tie all of it up in a house. I'm hoping to put down 20%, but I would be willing to put down upwards of ~50% if necessary. I'll definitely look into local credit unions and see if there's anything worth pursuing, thanks for the idea.

 In my opinion your best shoot is to talk to local Credit Union. If you can put 20-30k on 80k property, i think they will find a way to get you that loan. If one credit union says no, go to another. Also get ready to show them last 2 to 3 years of your income taxes.

Hello Richard I'm a real estate appraiser in South Florida and was wondering what are your terms for buy and hold investment properties? Also for flips as these are typically 6 month holding periods. I know many, many hard equity lenders in my neck of the woods however either their terms or their points are slowly creeping upwards therefore it's always smart business practices to explore new avenues. Kindly let me know

The credit score is killer. wrt the work history, at least you have a reasonable explanation give the economy since 2009. If I asked my nephew who graduated in 2008 and has a "stockboy" job, what he has been doing for the last 8yrs, he's say I dunno!?! I would consider a silent money partner (so long as he is REALLY silent). Take a look at debt to income ration. That has been hammering me. I have cheap interest rates and carry a high balance.

My first buy was a condo that I bought w/ a friend of a fried. We got along ok, until when he visited one time, and there was an 85# black lab, living in the condo.

CUs are usually looser on the guideline. I have shopped mortgages at Costco, and they had good pricing. Sam's club, etc. might have deals too.

I see auto financing similar to hard money lending in RE. I feel like I have to shower, just from a phone conversation. But you sound like yo might be on the inside a bit. Some of your lenders might lend to you!

You sound like you need an asset-based purchase mortgage. This is a loan based on the value and feasibility of the property, not your income. You need a credit score of 650, but can get a 70% loan-to-value.

Contact me if you need more info.

Richard