Creative financing and investment rentals
Hello BP forum, I've been an entrepreneur for quite some years now without a job that has backed me allowing to get traditional funding. I'm looking to expand my investment reach into other cities like KS City (specifically Wyandotte county) , Pittsburgh (Allentown), and Alabama (Huntsville).
#1. With not having the job backing me I'm looking for knowledge of how to show consistent income and not just a lump sum of funds as I wonder if I'd get rejected if trying to buy properties.
#2 Does anyone have knowledge of these areas I've mentioned above. For instance, are they growing areas with future upside, not looking to cash flow necessarily but gain appreciation over the next 4-5 years.
Thanks for reading and would love to get your feedback!
If you have 20-25% down, the property debt services 1.00 (rents fully cover the mortgage), FICO is above 650, and you have an LLC, you can qualify for a DSCR loan.
Also many DSCR lenders do not season or source bank statements. So as long as the deal makes sense you have the financing.
Here are a few creative financing options:
1. DSCR loans - 15-25% are typical down payment spread options, as long as your intended rents amount covers the mortgage, green light.
2. Seller financing - still some motivated sellers out there that have problems to solved and properties to be sold - help people solve there own problems and use seller financing
3. Syndicate/debt fund or raise the capital - find someone with the the gas you need and have them hop in car with you. If you have the time and they have the money it’s like match made in heaven.
DM with any other questions happy to help you create a way to make it work!
You may want to also consider a private or Hard Money lender to get your foot in the door. Allentown is a growing area but the values can change block by block. Make sure you find an agent or boots on the ground to help you understand the market.
Hello Dominick - I found myself in a similar situation when I got out of the Army and decided to become a full time investor. I quickly connected with two other folks who had similar goals and we partnered together. My investing knowledge plus their stable jobs made for a quick and easy time qualifying for financing. Years later this turned out to be the best option possible. We split the work up and have a good time doing it. I'm quite happy with our team.
Another thing to take note of - if you have two years of tax returns showing your self-employment income, you are probably good to work with a community bank! They will look at the income you claimed on your tax returns and qualify you based on this. This becomes a delicate balancing act between maximizing write offs and leaving enough income to qualify for a loan, but you may be closer than you think. Our community lenders here that hold the notes in their banks tend to have a bit more leeway in who they work with than you would imagine.