Is it difficult to get approved for loan as an agent (self empl)?

Question

I am transitioning from my previous job to a new one (real estate agent). My previous job was a 1099 position as well and was there for over 2 years. My goal is to purchase my first rental property this year but concerned about the reportable income aspect since i don't know when my first deal will be done. I need some advice on how to navigate this uncharted water for me and how to achieve my goal with the cards im dealt. Thanks BP!

Dan Weber · Answer

If you speak to a lender and are unable to obtain a residential mortgage to invest, I would suggest finding a commercial lender to get a deal done. I am in a similar situation and this is the route I will be going. The downsides of using a commercial loan for a 2-4 unit building are:

-higher interest rate than with a residential mortgage

-larger downpayment required (20%-25% as opposed to 3.5%-10%)

But, with this being said, I would still rather take the higher interest rate and find a deal that works than not be able to invest at all. Good luck!

Paul Defngin · Answer

If you are looking for conventional or FHA financing, then yes. You normally need 2 years history of the same field as self employed but don’t let this stop you from buying.

There are a ton of people who purchased an investment property without the aforementioned restrictions. Do a search on here and you will find: no money down, alternative/portfolio financing for investment properties, partners, private lenders, seller financing, etc.

Happy New Year. Good luck and best in your journey.

Stephanie P. · Answer

@Ronald Mejia

You need a portfolio loan from a mortgage broker.  No income verification is the way to go.

Ronald Mejia · Answer

my previous job wasnt a W2, I already have my RE license and hung with a broker. So essentially im going from 1099 to 1099 anyway.

Matt Nico · Answer

@Ronald Mejia

Probably not what you want to hear but id stick with the W2 job while getting your RE license. For lenders to trust you to buy rentals, it helps that you own at least 1-2.

Get your feet wet with real estate by buying a house now and learn everything you can about real estate in general and your specific market. It might seem like you are wasting time at first, but it will let you take off like a rocket ship later.

Happy Housing,

Matt

Shawn Mcenteer · Answer

@Ronald Mejia any chance you can keep your job until you buy?  That may make it easier for you.

Ronald Mejia · Answer

Thanks guys for the help!

Is it difficult to get approved for loan as an agent (self empl)?

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