Loan help!!! No w-2 or previous tax return (student in 16')

7 Replies

Ok, here is my situation. I'm a first year commercial real estate agent and work 100% off commission. No 2016 Tax return because I was a senior in college. No pay stubs or w-2's because I'm 1099 commission. 

I have 15% cap CASH-FLOWING 4-unit under contract. According to the contract, I have until 1/5/18 to find financing. Every bank I spoke to says I need previous year tax return or pay stubs or w-2. By the time 2017 taxes get filed, I'll be way out of contract (mid February). 

Any advice? Should I approach the sellers and put more money down until I file my 2017 return? Or are there any companies out there that would give me a loan in this situation? I plan on refinancing in about a year regardless. 

10-14% interest hard money loan

There are permanent financing lenders out there who care more about how much cash flow the property brings than how much W2 income you bring.  Their rates will be somewhere between a bank and hard money at 5-8%.

You'll need to have 25% - 30% down payment for permanent financing though.

Does it need any work, and if so, do you need a loan for those rehab funds?  If so you can get a 1-yr hard money rehab loan.

Originally posted by @Nghi Le :

There are permanent financing lenders out there who care more about how much cash flow the property brings than how much W2 income you bring.  Their rates will be somewhere between a bank and hard money at 5-8%.

You'll need to have 25% - 30% down payment for permanent financing though.

Does it need any work, and if so, do you need a loan for those rehab funds?  If so you can get a 1-yr hard money rehab loan.

 That's exactly the type of loan I was expecting/looking for. Any ideas on where to find some of these types of lenders? Does permanent financing mean I will not be able to refinance?

@Gabe Sirkin are you looking for a 12 month term or long term financing with a 5/1 arm? Can you tell me more about the property? Is this your first investment property? Do you plan to live in it?

@Gabe Sirkin

I'll send you more information on the lenders.

Permanent financing from commercial and hard money lenders usually have a prepayment penalty, which makes it painful to refinance.  If you are planning to refinance, perhaps it's better to get a bridge loan (or rehab loan if the property needs work).

Not having two years tax returns isn’t a big issue the bigger issue for conventional financing will Be you’re a 1099 employee.

That probably makes you unable to get conventional financing at this time, but like others have said there are other options

Caleb has the right idea. Unfortunately conventional lending with local Credit Unions and Banks work off your financial history, not projected. (ask the lender if they would work off contracts you may be able to use the contract for the 15% cap.)You may have to go different routes aka Hard Money. Best of luck to you!

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