MLB player struggling to get approved

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MLB player struggling to get approved

Jacob May
Carolina Beach , NC · Member since 2018 · 9 posts · 3 votes

I am currently a professional baseball player for the Chicago White Sox.  With that being said it is extremely hard to get loans from the bank due to only having seasonal income.  I was fortunate enough to get approved last year after making my MLB debut, I guess making myself seem more convincing.  

I purchased a two bed two bath condo in Carolina Beach and will be renting this unit out for the summer.  After realizing the amazing benefits of this I would love to continue to invest more into real estate!  Do you have any advice on the best ways to get approved from the banks with a seasonal income?  I'm currently looking to purchase another vacation rental, or a multi home that my significant other and I are willing to do all management.  I'm extremely blessed that she holds a Northwestern degree and is a professional photographer and marketer  ....believe it or not this is my passion above baseball.  

From the research I have personally done it seems that my only options are partner investing such as peer to peer funding.  Are there any other ways? I'd love to hear your thoughts.  Thank you all !!!

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Timothy Doenges
Real Estate Agent · Mount Nebo, WV · Member since 2017 · 174 posts · 68 votes
8y
Any interest among your teammates to be money partners in a multi family? If you get some high-pay players in on the deal, you might be able to get into a good rhythm of buying with teammates’ money, rehabbing, renting, refinancing out of the private money, and finding another deal!
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  • Marcus Johnson
    Investor · Saint Paul, MN · Member since 2015 · 663 posts · 512 votes
    8y
    Teachers, construction workers and horticulture workers in the Midwest are seasonal also. Are you paid for how many months out of the year as a MLB player? My suggestion is to prove the to a lender what your yearly Salary is by showing them your tax returns and by giving them proof of assets you have. I work with a small local bank and they are quite flexible with types of loans, documentation needed and rates/Dp%. So really you just need to do some research and call up a number of lenders to have them look at your situation give you some advice on how to structure a loan.
    1Reply
  • Clayton Cook
    Dallas, TX · Member since 2017 · 5 posts · 11 votes
    8y

    Hey man I'm with the Rangers and was worried about this same thing. I just got my real estate license and was looking to buy an investment property before spring training. Were you on a free agent minor league deal before you got called up when you were having a hard time being approved or your original minor league deal?

    1Reply
  • Jacob May
    OP
    Carolina Beach , NC · Member since 2018 · 9 posts · 3 votes
    8y

    That is how I got approved for my current condo.  I did find it extremely hard due to the fact we only get paid 6 months out of the year on salary.  Any other money players bring in during the off season come from endorsements, lessons, part-time stuff.  Thank you so much for your input it was extremely thoughtful.

    0Reply
  • Bryce CutlerPro Member
    Investor · Wynantskill, NY · Member since 2013 · 180 posts · 77 votes
    8y
    Hey guys, I’m a banker by day and investor by night and weekend. Best bet is to shop around for a mortgage broker who knows how to best work with self employed workers. Their structure may be similar to yours from An underwriting standpoint. Next best suggestion is a smaller community bank who portfolios their own loans. They tend to be more flexible. Good luck guys, both in your investing and in your baseball careers. Bryce
    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Bryce Cutler  that was my suggestion if I was in @Jacob May shoes I would be taking my banker to lunch have all my accounts with him or her.. and build that relationship.. many small commercial banks ( my bank) are precluded from owner occ loans but can do investor loans and that is all they do its their specialty.. and Deposit relationships are important.. plus they get to know you.

    in my line of work and back in the day especially in my timber days.. we did not log from late November to about May.. kind of like storm chasing.. but come may to November we made some significant income.. same with being a builder.. that I am now.. we go into a project like the one I am doing now 23 homes.. we put money out for 18 months NO income but we are starting to sell.. bank gets paid back at accelerated rate last 6 or 7 we make whopper income..

    these are relationship facilities.. I play heck getting a conventional loan I have one on my principal.. but with a tax return that is 3 inch's thick no mortgage broker can underwrite me.. its painful.

    you need that commercial banker that knows you and you grow up with them.. my guy we been doing it now for 24 years.

    I bought Jerome Kersey s 3/4 built home in Portland back in the day and finished it.. put it on the market for 5 million.. we had another basketball player make an offer but same thing he was in first year or two and had not hit the big big yearly pay.. but had nice down payment.. but he could not get a loan.. so I get that part of it..

    Sometimes you just have to wait and stack up your chips..

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    2Reply
  • James Barnhart
    Rental Property Investor · Ocala, FL · Member since 2016 · 226 posts · 140 votes
    8y

    Have you considered making income during the off season?  I don't know what you studied in college, but maybe you could use that skill to bring in money?  

    And, no matter what any of us do, we are all involved in selling of some kind to someone.  I bet you could be a good sales person, and maybe your baseball player status will help you to make sales.  Go for it!

    0Reply
  • Jacob May
    OP
    Carolina Beach , NC · Member since 2018 · 9 posts · 3 votes
    8y

    @claytoncook when trying to get approved for my current place I failed to find anyone that would do it until I was added to the 40-man roster.  After being added I held out to move forward with the process to see if I could get in the Big leagues (25-man roster) due to the bigger salary obviously.  I made the team out of camp and immediatly started the approval process.  This is how I got approved for my first purchase.  I am currently not on the roster anymore after being Designated for Assignment.  This is why I am seeking guidance. I would like to purchase a second income property.

    0Reply
  • Jacob May
    OP
    Carolina Beach , NC · Member since 2018 · 9 posts · 3 votes
    8y

    @James Barnhart This is very true.  I have done minor things for more income like lessons and baseball camps for some supplemental income, but nothing of great enough value to really have a bank willing to take the risk on me.

    0Reply
  • Jacob May
    OP
    Carolina Beach , NC · Member since 2018 · 9 posts · 3 votes
    8y

    @Bryce Cutler Thank you for the advice that's defiantly something I will start to purse!  Let the search begin!! 

    0Reply
  • Steven Crosby
    Decatur, GA · Member since 2016 · 27 posts · 5 votes
    8y
    It's quite unfortunate a major league baseball player is a hero and star in the eyes of so many people, especially children, and yet it's hard to obtain a loan. I would recommend establishing personal relationships with smaller Community Banks or credit unions. While seasonal income, especially in a risky environment where injury can quickly eliminate long-term income, is a bit of a downside to the underwriter there is always a major factor to consider. Any underwriter is going to plug in multiple numbers and factors but one of the biggest ones that are commonly overlooked especially in the terms of a community bank or smaller Bank is the emotional evaluation. I would highly recommend establishing relationships with smaller Banks and seeing where it takes you from there.
    0Reply
  • Timothy Doenges
    Real Estate Agent · Mount Nebo, WV · Member since 2017 · 174 posts · 68 votes
    8y
    Any interest among your teammates to be money partners in a multi family? If you get some high-pay players in on the deal, you might be able to get into a good rhythm of buying with teammates’ money, rehabbing, renting, refinancing out of the private money, and finding another deal!
    3Reply
  • Weston Harding
    Real Estate Broker · Chicago, IL · Member since 2017 · 179 posts · 65 votes
    8y

    @Jacob May This is a common question for many clients I work with that are not employed as a "typical W2/salaried" employee. I always tell my clients to talk with @Michael Facchini he is my go to here in Chicago. 

    PS His wife also works for MLB as well :) 

    1Reply
  • Michael Facchini
    Lender · Chicago, IL · Member since 2017 · 438 posts · 193 votes
    8y

    Happy to help!  Never hesitate to reach out Jacob!

    0Reply
  • Tarik Turner
    Lender · Hackensack, NJ · Member since 2016 · 1k+ posts · 372 votes
    8y

    stated income loans tend to be a bit more expensive but Can get you in the door and set you up for a refi down the line 

    0Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    8y
    Originally posted by @Account Closed:

    $500,000 signing bonus plus  2017 salry of $535,000 is well over a Million dollars.  Guy only 26 years old.

    The problem i see is  where did all that money go?  He should have at least 2 decent already paid for conodos under his belt.

    Go pay for a session with Dave Ramsey and work out your financial DEMONs----he works with a lot of athletes.   Athletes who have money guys yet who are broke.

    Why are you on this site? Looking back at whatever threads you responded to - all of your answers are troll like.  

    0Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    8y

    @Jacob May , if I were you, I'd change my profile to show the last name only as M. For one thing, you don't want everyone being able to google all of your public details and spread them out here. 

    2nd - you don't want future tenants or business partners being able to google you and BP posts with questions come up. 

    3rd - having 1st and last name here will bring shady characters out of the woodwork, who may contact you with private messages, smelling money. Be careful who you deal with here. There are great and knowledgable investors and there are also not so savvy individuals. You have to vet them carefully. 

    1Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    8y
    1Reply
  • Jacob May
    OP
    Carolina Beach , NC · Member since 2018 · 9 posts · 3 votes
    8y

    @Account Closed I appreciate your concern.  Yes that is what I signed for and I thank God everyday for that. 

    -If you didn't know money does get taxed so don't let your eyes be deceived.-

    I was blessed enough to pay off any student loans I had from college with that signing bonus.  I was also blessed enough to finally buy my first condo with my personal finances.  I understand that I am 26 but also mature enough to realize baseball does not last forever.  I am only trying to seek out advice during such important decisions in my early adult life.  I have a passion for real estate and would love to learn as much as possible.  As stated in the first post I had a hard time getting APPROVED for a loan.  If you are educated on the process of getting approved there are more factors that go along with it then the final number in your bank account.  

    Because this is a educational forum I'll let you know that baseball players get paid seasonally(6months out of the year) banks like to see that you have yearly consistent paychecks (no matter how much you may be getting paid for only half the year).  

    My question was if there is any "experienced" advice on other ways you can get banks to be a little more agreeable with giving you a loan considering the first loan I received was so difficult.

    Further more if you are still reading I hope that I have helped you understand my question a little better.  Either way I appreciate your input . 

    1Reply
  • Steven Crosby
    Decatur, GA · Member since 2016 · 27 posts · 5 votes
    8y

    Obviously where the money went is a concern but that will be shown up on any financial analysis getting approved for a loan. 

    0Reply
  • Steven Crosby
    Decatur, GA · Member since 2016 · 27 posts · 5 votes
    8y

    The best advice I could offer is find a credit union or Community Bank with which you have a relationship with or can establish one with. Another good piece of advice I read in here is about looking to invest in multi-family units with others. Because of the situation and especially the risk of your job it will be difficult to get approved by any large bank but I'm sure there are several Community Banks and Credit Unions who would gladly work with you

    0Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    8y

    what about your partner? Can she help you qualify? 

    Or you could look for a fixer upper and then use groundfloor or lima or other asset based lender to finance purchase and rehab and then refi with an asset based lender or flip and repeat and then have regular income to show in those other 6 months. 

    0Reply
  • Stone G.
    Real Estate Agent · Sugar Land, TX · Member since 2016 · 23 posts · 6 votes
    8y
    Jacob, I’m with the Marlins Organization. I’m about to close on a multi family here in Texas. One way is to get a parent to co sign if they are willing...
    0Reply
  • Jay Helms
    Rental Property Investor · Gulf Breeze, FL · Member since 2014 · 1k+ posts · 733 votes
    8y

    @Jacob May - partner with someone who can sign on the note. Doesn't have to be a peer networking group but you can JV with one or several individuals to form an LLC that holds the property. How you structure the deal is up to you and your investors, just want to make it worth everyone's interest to do this over and over again. Does that make sense?

    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    8y

    @Jacob May @Clayton Cook @Stone G. A podcast guest pointed me in the direction of   AFrugalAthlete.com . Amobi Okugo is an MLS player who wants to help his fellow Pro athletes make smart money decisions because the money doesn't last forever.

    I know it doesn't answer your question directly, but I wanted to  share the site.

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    1Reply
  • Harjeet BhattiPro Member
    Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
    8y

    @Jacob May According to FNMA guidelines this shouldn't be problem.  Talk to some other banks also. 

    The lender must verify the following for seasonal income.

    ✓Verification of Seasonal Income
    Verify that the borrower has worked in the same job (or the same line of seasonal work) for the past two years.
    Confirm with the borrower’s employer that there is a reasonable expectation that the borrower will be rehired for the next season.
    For seasonal unemployment compensation, verify that it is appropriately documented, clearly associated with seasonal layoffs, expected to recur, and reported on the borrower’s signed federal income tax returns. Otherwise, unemployment compensation cannot be used to qualify the borrower. See B3-3.1-09, Other Sources of Income, for more information on unemployment benefits.Note: Seasonal and non-seasonal unemployment compensation may be used in qualifying a borrower for a DU Refi Plus or Refi Plus mortgage loan. See B5-5.2-02, DU Refi Plus and Refi Plus Underwriting Considerations, for income documentation requirements.
    0Reply
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