Best Banks For Working With RE investors W/out W2

5 Replies

About to start the dreaded process of working with a bank for a conforming loan. What banks have you worked with that offer conforming/jumbo loans (California) that understand RE investors income? I deal mostly with small regional banks and credit unions for my real estate business, but I definitely want to get tied up in a 30 year fixed conventional loan on my primary property.

I paid cash for the house and only have about 60 days to close on the loan, in order to take advantage of the primary home interest deduction. Even when I had a W2 job it was tough getting loans because underwriters took so long attempting to seperate out "one time expenses" vs ongoing expenses on my schedule E's. Without doing this I show a loss on paper year after year. 

Thanks in advance!!

Justin, is your income all primarily all Schedule E or also Schedule C through Sole Props/LLCs, etc? The great thing about Depreciation, Taxes, Mortgage Interest on Schedule E, it can be added back as income even if you show a net loss on your Schedule E properties. 

How long ago did you purchase your primary with cash? I also sent you a connection request, so please feel free to message me details if that is better for you than posting on the open forum. Thank you!

@Grant Schroeder Thank you for replying. Besides some minimal K1 income, 98% is schedule E. Yeah I’ve worked with several banks in the past that have gone through and added back “one time “ expenses, some of the capex, and depreciation. It is always an arduous process though and ends up with underwriting issues 45 days in.

I understand every loan that is originated with the mindset of getting sold off to the secondary mortgage market gets scrutinized to the fullest. Just hoping there is a bank that has a reputation of working with better with unorthodox (non W2) income.

Hoping for better than a bank statement loan or regional bank 7yr fixed.

Thanks

Hey @Justin R. , thanks for your response. What size loan would you be looking to take out? Cash out all the way up to 80 LTV, I assume?

Would you mind if I took a look at your 2019 & 2020 tax returns to dive into your Schedule E? I pre-underwrite loan files before ever submitting them into processing for underwriter review so you don’t get 45 days down the line and the underwriter blows it up. I just helped @Craig Gerulski with this on his primary in CA. I vetted everything up front to see if it would work and we sailed through final UW approval on the back end. I like to get it up front so it saves you time and headache later. If it won’t work, then you find out immediately, but if we can get UW sign off upfront, you can have peace of mind through the process and not be white knuckling it on day 45. I use the same worksheet to evaluate Schedule E that the UW uses and I’d be happy to show you what I come up with this. Let me know what you think!

@Justin R. I had a great experience with @Grant Schroeder !  I was in a unique situation where all my income for my rentals was from Airbnb.  Many lenders had issues qualifying me for my refi.  Grant worked closely with the underwriter before submitting the application to figure out exactly what we could use and how to qualify me.  He is an investor as well so that helps him come up with creative options as he knows the game.  Highly recommend using Grant.

Appreciate your vote of confidence @Craig Gerulski ! I really enjoyed working with you on your home and look forward to working together again soon!