Chicago Multi-Family Roadblock
New to Real Estate · Chicago · Member since 2024 · 9 posts · 6 votes
Chicago Multi-Family Roadblock
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Eudith VacioPro Member
Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votesHey @Michele Richard - I'm sorry to hear that you're having difficulities getting approved for this property. While I am not a lender, I have worked with individuals that were 1099 contractors that didn't file taxes or could not prove through their taxes / pay stubs that they were making money so they used bank statement loans. They're great, but require a higher down payment, usually 20-25% down and a higher interest rate. I can DM you the lenders that we've used in the past, if that is something you are interested in, but I really do hope you're able to find a way!
14 Replies
- 1yJaycee GreenePro MemberReal Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
Quote from @Michele Richard:
Hello all,
I am in the process of buying my first property but have hit a roadblock. I want to house hack a 2-3 flat in the west loop or river north of Chicago but do not qualify for a loan because I am a 1099 employee that started work the end of last year and I am being told I need 2 years of documentation to show sufficient funds.
My husband has a W2 job but his commission is not accounted for either, so we only qualify based on a very small income that does not reflect our overall income status.
With that being said, I want to buy a multi family (roughly 800K-1 million) and house hack with a 10% down using my own funds and would like to figure out a way to do that. I know asking a family member to cosign is a possibility but I am open to any other suggestions. We also would be open to other investors joining our team to help us out while making a nice return. All advice is appreciated in advance!
Hi @Michele Richard, welcome to the BP Forum! So, are you still wanting to house hack with a family member co-signer? Or are you looking to attract investors to the deal? It seems you're using these concepts interchangeably.
FWIW, in theory you could find a Limited Partner investor (aka an LP) that would cover whatever down payment/equity you need, and you and your husband could be tenants (personally) in the property. It wouldn't be a true "house hack", but you'd own a portion of the property you live in. Not all investors would necessarily be open to the concept, so you may have to float it to some folks before you move forward. Your thoughts?
- New to Real Estate · Chicago · Member since 2024 · 9 posts · 6 votes1y
Quote from @Jaycee Greene:
Quote from @Michele Richard:
Hello all,
I am in the process of buying my first property but have hit a roadblock. I want to house hack a 2-3 flat in the west loop or river north of Chicago but do not qualify for a loan because I am a 1099 employee that started work the end of last year and I am being told I need 2 years of documentation to show sufficient funds.
My husband has a W2 job but his commission is not accounted for either, so we only qualify based on a very small income that does not reflect our overall income status.
With that being said, I want to buy a multi family (roughly 800K-1 million) and house hack with a 10% down using my own funds and would like to figure out a way to do that. I know asking a family member to cosign is a possibility but I am open to any other suggestions. We also would be open to other investors joining our team to help us out while making a nice return. All advice is appreciated in advance!
Hi @Michele Richard, welcome to the BP Forum! So, are you still wanting to house hack with a family member co-signer? Or are you looking to attract investors to the deal? It seems you're using these concepts interchangeably.
FWIW, in theory you could find a Limited Partner investor (aka an LP) that would cover whatever down payment/equity you need, and you and your husband could be tenants (personally) in the property. It wouldn't be a true "house hack", but you'd own a portion of the property you live in. Not all investors would necessarily be open to the concept, so you may have to float it to some folks before you move forward. Your thoughts?
@Jaycee Greene hello, thank you for the reply. I am open to family members or investors being apart of the deal, I just want to make sure I am exhausting all options before making a decision. Would having a LP qualify me for a bigger a loan that I am unable to get right now with a 1099 status? Or is having an LP just going to assist with the down payment?
- 1yJaycee GreenePro MemberReal Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
Quote from @Michele Richard:
Quote from @Jaycee Greene:
Quote from @Michele Richard:
Hello all,
I am in the process of buying my first property but have hit a roadblock. I want to house hack a 2-3 flat in the west loop or river north of Chicago but do not qualify for a loan because I am a 1099 employee that started work the end of last year and I am being told I need 2 years of documentation to show sufficient funds.
My husband has a W2 job but his commission is not accounted for either, so we only qualify based on a very small income that does not reflect our overall income status.
With that being said, I want to buy a multi family (roughly 800K-1 million) and house hack with a 10% down using my own funds and would like to figure out a way to do that. I know asking a family member to cosign is a possibility but I am open to any other suggestions. We also would be open to other investors joining our team to help us out while making a nice return. All advice is appreciated in advance!
Hi @Michele Richard, welcome to the BP Forum! So, are you still wanting to house hack with a family member co-signer? Or are you looking to attract investors to the deal? It seems you're using these concepts interchangeably.
FWIW, in theory you could find a Limited Partner investor (aka an LP) that would cover whatever down payment/equity you need, and you and your husband could be tenants (personally) in the property. It wouldn't be a true "house hack", but you'd own a portion of the property you live in. Not all investors would necessarily be open to the concept, so you may have to float it to some folks before you move forward. Your thoughts?
@Jaycee Greene hello, thank you for the reply. I am open to family members or investors being apart of the deal, I just want to make sure I am exhausting all options before making a decision. Would having a LP qualify me for a bigger a loan that I am unable to get right now with a 1099 status? Or is having an LP just going to assist with the down payment?
@Michele Richard The amount of the loan will be based on the cash flow of the property (along with the appraised value). The presence of an LP (the wealthier and the higher the credit score the better) may make it easier to get approved for a loan or a lower interest rate. Note, taking on an LP will keep you from being able to get an FHA loan (which is what many "house hackers" use). Feel free to DM me!
- 1yEudith VacioPro MemberReal Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
Hey @Michele Richard - I'm sorry to hear that you're having difficulities getting approved for this property. While I am not a lender, I have worked with individuals that were 1099 contractors that didn't file taxes or could not prove through their taxes / pay stubs that they were making money so they used bank statement loans. They're great, but require a higher down payment, usually 20-25% down and a higher interest rate. I can DM you the lenders that we've used in the past, if that is something you are interested in, but I really do hope you're able to find a way!
- New to Real Estate · Chicago · Member since 2024 · 9 posts · 6 votes1y
Quote from @Eudith Vacio:
Hey @Michele Richard - I'm sorry to hear that you're having difficulities getting approved for this property. While I am not a lender, I have worked with individuals that were 1099 contractors that didn't file taxes or could not prove through their taxes / pay stubs that they were making money so they used bank statement loans. They're great, but require a higher down payment, usually 20-25% down and a higher interest rate. I can DM you the lenders that we've used in the past, if that is something you are interested in, but I really do hope you're able to find a way!
Hey Eudith I appreciate you taking the time to respond to my post. Yes, you can send my the info of the lenders, I would be happy to look into that option as well 😊
- Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes1y
I recommend connecting with a few investor-friendly lenders to discuss your options. If you need a few referrals, let me know.
- New to Real Estate · Chicago · Member since 2024 · 9 posts · 6 votes1yHey Paul thank you for the response. I would really appreciate any information you can share! Feel free to DM me 😊
Quote from @Paul De Luca:
I recommend connecting with a few investor-friendly lenders to discuss your options. If you need a few referrals, let me know.
- Lender · Chicago · Member since 2024 · 89 posts · 25 votes1y
Hey Michele, I'm familiar with the situation. The best way to go about this is to set up an LLC and there are a couple of different loan options that you could still take advantage of. Message me directly for advice.
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes1y
Quote from @Michele Richard:
Hello all,
I am in the process of buying my first property but have hit a roadblock. I want to house hack a 2-3 flat in the west loop or river north of Chicago but do not qualify for a loan because I am a 1099 employee that started work the end of last year and I am being told I need 2 years of documentation to show sufficient funds.
My husband has a W2 job but his commission is not accounted for either, so we only qualify based on a very small income that does not reflect our overall income status.
With that being said, I want to buy a multi family (roughly 800K-1 million) and house hack with a 10% down using my own funds and would like to figure out a way to do that. I know asking a family member to cosign is a possibility but I am open to any other suggestions. We also would be open to other investors joining our team to help us out while making a nice return. All advice is appreciated in advance!
Potential Solutions
1. Wait- I'm not a fan of this solution but....
2. NonQM loan- It's not a traditional owner occupied loan & I'm not sure you'll qualify but it's often used by Self Employed that may not qualify for a traditional loan
3. Make non-traditional offers like owner financing. All the owner can do is say no but you never know someone may say yes. My opinon- You should be offering 20% down
4. Change your business plan- If you have 10% for an $800K purchase ($80K) that's enough to change your business plan. Invest in another type of deal as a non-owner occupant, maybe with a partner. It could be a fix and flip that would allow you to turn the $80K into a larger number
5. This is a self promotion because I don't have all the ideas- Join a Real Estate Mastermind where other may have some ideas for you.
- Real Estate Agent · Chicago · Member since 2021 · 168 posts · 62 votes1y
Hey Michele message me when you get a chance but, an amazing loan program that associated bank used to have was this! I used it in 2020 and it was incredible for buying a multi unit with no PMI https://mortgageone.com/wp-content/uploads/2018/02/Associate...
- 1yTj FlorosPro MemberReal Estate Agent · Chicago · Member since 2025 · 95 posts · 74 votes
Quote from @Michele Richard:
Hello all,
I am in the process of buying my first property but have hit a roadblock. I want to house hack a 2-3 flat in the west loop or river north of Chicago but do not qualify for a loan because I am a 1099 employee that started work the end of last year and I am being told I need 2 years of documentation to show sufficient funds.
My husband has a W2 job but his commission is not accounted for either, so we only qualify based on a very small income that does not reflect our overall income status.
With that being said, I want to buy a multi family (roughly 800K-1 million) and house hack with a 10% down using my own funds and would like to figure out a way to do that. I know asking a family member to cosign is a possibility but I am open to any other suggestions. We also would be open to other investors joining our team to help us out while making a nice return. All advice is appreciated in advance!
Hi Michele,
I will just put my experience into this list. I used a homestyle loan on a rehab project and I needed a family member of mine to be a co-signer as a non owner occupant. That allowed me to spread my DTI around to get the loan. I would talk with a couple lenders and see if that is possible. Have them sign to get you into the loan, you put up all the money and some time down the line you refi the property into your name and remove them from the loan.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes1y
Hey there @Michele Richard - Great to e-meet you!
I've got some great connections that might able help get this deal done....Check with @Zack Karp and @Jose Valdovinos - they've done deals I didnt think anyone else could get done.
West Loop is prime time, where exactly are you looking at that has 2-3 flats?
Also, I highly recommend coming out to some of the local Chicago meetups: https://www.biggerpockets.com/forums/521-real-estate-events-...
Quality Builders4.966 Reviews - 1yMark AinleyBusiness MemberProperty Manager · Roselle, IL (Chicago Suburb) · Member since 2013 · 2k+ posts · 1k+ votes
@Michele Richard what if you purchased a property that needs some work to it as an investor getting a rehab loan and then refinances it out into an owner occupied 20%-25% LTV but your work you do will add value to create additional equity when you refi. It is a lot of moving parts but you will come out way further ahead with far less left in the property.
GC Realty & Development LLC4.61085 Reviews - Lender · Marlboro, NY · Member since 2016 · 71 posts · 3 votes1y
Hi Michele Richard I have a way that I could Discuss with you which might work in your situation. Need more info to see if it is something I could get done for you.
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