Loan options with no job, but cash on hand

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Loan options with no job, but cash on hand

Jeff DiMarco
Member since 2022 · 4 posts · 2 votes

I left my job last year after realizing a large gain in crypto in order to figure out a better way to spend my time. I decided I'd like to focus on real estate investing in order to preserve wealth and build cash flow. The strategy I'm looking to focus on is buy and hold SFRs, starting out in the 100k-200k range in my hometown in Maryland. Unfortunately, I realized this after I dropped my W-2, so I'm curious about any ideas/types of lenders that would help me finance. I bank with Schwab and they partner with Rocket Mortgage, so I gave them a call. It turns out they will not lend to me even after considering ~2mm in assets that they could use as a "depletion income". I was thinking of three more options:

1) Buy a couple properties with cash this year in order to produce an income on next year's tax returns to satisfy a lot of lenders. The downside is obviously that it locks up tons of cash

2) Apply for an investment loan with my fiancee

3) Find a lender that considers cash and equivalents to secure an investment mortgage.

I'm curious if anyone has any experience/advice for a cash-heavy, but job-less situation

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Kevin Woodard
Lender · Nationwide · Member since 2021 · 220 posts · 105 votes
4y

Hi Jeff I think you have a few options at hand. Specific to your situation would be a DSCR loan that utilizes the income of the property for leverage or a bank statement loan, although I do not specialize in these.
Hope this helps and congratulations on your situation, it’s a good place to be in!

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  • Kevin Woodard
    Lender · Nationwide · Member since 2021 · 220 posts · 105 votes
    4y

    Hi Jeff I think you have a few options at hand. Specific to your situation would be a DSCR loan that utilizes the income of the property for leverage or a bank statement loan, although I do not specialize in these.
    Hope this helps and congratulations on your situation, it’s a good place to be in!

    2Reply
  • Bruce D. KowalBusiness Member
    Metro NY + New Bedford · Member since 2022 · 294 posts · 216 votes
    4y

    So you sold your crypto at the top in 2021?   You should write a book and get a gig on financial shows.   I doubt many others did so well.  So, now you have no stress, and are looking to enter a very stressful line of business.  I don't know how old you are, but if it were me, I would get into the medical care field as some kind of licensed professional.  Otherwise, you run the risk of making bad investments and losing too much.  Or place your money with a good wealth manager, such as Morgan Stanley, and get some income now.  We should have have such choices.  Oh, one more thing, move to a State with zero income tax:  Florida, New Hampshire etc.

    [email protected]617-704-1194
    Bruce D. Kowal, CPA4.97 Reviews
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    0Reply
  • Upen PatelPro Member
    Lender · Nationwide Lender · Member since 2015 · 1k+ posts · 814 votes
    4y

    @Jeff DiMarco I can think of two Non-QM loan options for you. Asset Depletion and DSCR. Happy to connect and see which one works best for you.

    [email protected]571-200-6180
    1Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    4y
    Quote from @Jeff DiMarco:

    I left my job last year after realizing a large gain in crypto in order to figure out a better way to spend my time. I decided I'd like to focus on real estate investing in order to preserve wealth and build cash flow. The strategy I'm looking to focus on is buy and hold SFRs, starting out in the 100k-200k range in my hometown in Maryland. Unfortunately, I realized this after I dropped my W-2, so I'm curious about any ideas/types of lenders that would help me finance. I bank with Schwab and they partner with Rocket Mortgage, so I gave them a call. It turns out they will not lend to me even after considering ~2mm in assets that they could use as a "depletion income". I was thinking of three more options:

    1) Buy a couple properties with cash this year in order to produce an income on next year's tax returns to satisfy a lot of lenders. The downside is obviously that it locks up tons of cash

    2) Apply for an investment loan with my fiancee

    3) Find a lender that considers cash and equivalents to secure an investment mortgage.

    I'm curious if anyone has any experience/advice for a cash-heavy, but job-less situation

    Definitely a DSCR loan.
    1Reply
  • Erik Browning
    Lender · CO CA TX WA ID OR · Member since 2020 · 419 posts · 542 votes
    4y

    @Jeff DiMarco what a nice problem to have. As everyone else mentioned, a DSCR loan is the way to go. Or if you get a handful of them at once, you can also consolidate into a commercial loan.

    Also, if you don't already know this bank statement/DSCR loans will not have the attractive rates vs. conventional financial products. So be prepared to pay more. The asset and how it will perform is the most crucial part of this. Buying correctly and ensuring you get decent returns is even more critical.

    I know this might be somewhat controversial, but maybe if you just buy one (possibly 2) property(ies) with cash right now and see if being a landlord is right for you could be a good idea. You can also start the timeline for which you are a landlord and are receiving monthly payments from your rental(s). This income would open up your options in the future to more conventional financing and put that income on your taxes. Once proven, you can always refinance out and capture 75% of the equity.

    I figure the risk is diminished slightly since you will be using anywhere from 10%-20% of your cash position and not dumping the whole nest egg in.

    1Reply
  • H. Jack Miller
    Lender · Boca Raton, FL · Member since 2014 · 250 posts · 133 votes
    4y

    You may want to contact some private lenders, rates will be higher but they should do it

    1Reply
  • Jeff DiMarco
    OP
    Member since 2022 · 4 posts · 2 votes
    4y

    Thanks for the suggestions! I think I'll start with a cash property or two as Erik suggested and then look into the DSCR loan as everyone recommends

    0Reply
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