can't qualify for the loan on a good deal house

5 Replies

I have a friend that called me yesterday. He was looking for advise. He has been watching me purchase and rent properties and he wants to get in the game. He makes decent money (He is a part time college student and works managing a company that sells over the summer) He has told me in the past that he will make $40-60K over the summer. Most is 1099 income and his accountant somehow shows a very small income with all his write offs. At any rate he has tried two banks and 1 lending agency and was turned down by all. His parents think he will loose money in real estate so no cosign with them. 

He found this FSBO in the Provo/Orem/ Lehi area which according to most of the reports is growing leaps and bounds and has tons of the tech and future jobs so the location is great. He plans to live in it and rent to some of his college friends. It has a separate basement entrance as well that he would rent to a couple/small family .

I think it has potential. I'm asking your help on creative options that he could purchase and use the property as and investment to get him started in the real estate investing game.

He could get a hard money loan on it, but he wouldn't be able to live in it.  It would have to be an investment property.

Later, he could refinance it with a traditional bank.  By then, he would have an income history on it so the bank could use that to help him qualify.

If you dont pay uncle sam, you cant get fannies cheap money. hard money will be a no go. need 2 years if 1099

If he's planning to live in the property maybe he could qualify for an FHA loan? FHA loans are designed for people with lower credit or different sources of income.

He could also ask the owner if they would be willing to accept payments each month for their equity (seller financing). If you structure the deal correctly and the numbers make sense it could be a win-win for both of them. 

He could also go with a non-qm bank statement program.

There are multiple lenders out there that will still do stated doc loans, they come at a higher interest rate but as long as his credit is good, he should have no problem obtaining a loan. I come across this a lot and can probably locate him a broker in his area  if needed.

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