I’m trying to make my first deal and I have hit a bump in the road.

I work for an Amazing company that has allowed us to buy their homes for a 10% discount (it is new construction).

What I’m looking at is a town home that is selling retail at $230,990. With this discount it would put the purchase price at $207,891.

Here’s the problem: My wife and I are both relatively new to this job and it’s sales, so you need 2 years worth pay stubs to apply for a loan with the bank. I’m thinking about reaching out to private money but I’m just not sure of all my options.

My goal with the property would be the BRRRR strategy, the rental value of this property would be $2000 a month.

Is there any advice y’all could provide?

Thank you!

Hi @Peyton Finical - 10% off is fantastic. Before going to a private lender, have you tried working with the bank that you have your personal accounts with? Having a relationship with your lender can go a long way. Put together a PFS and If you have the liquidity to put 20% down plus at least 6 months cash reserves I’d go ahead and apply. Employment length/history is important but not a deal breaker depending on the situation. 

@Michael Quealy

I’ve not thought of that! Could be a really good idea, I know I don’t have enough for the 20% down. Could I just use private money for that amount?

@Peyton Finical It may not be the best way to go since it will then show up as a debt, thus increasing your DTI. The bank will want to source where you got the 20% and factor that in when underwriting. The worst your bank can do is tell you "no" but they will give you a reason which will help you make a decision on whether or not to go with a private lender or give it some time before reapplying.

@Michael Quealy

Awesome! Thank you so much!

@Peyton Finical if it's new construction, it's likely not a candidate for the BRRRR strategy even with the 10% discount. That doesn't mean it won't be a great property for you, just that it wouldn't be worth the trouble to refinance - especially since you're financing up front.

@Nicholas L.

That makes sense, I think I’m just going to go talk to my bank and see what we can do!