High Credit + High Savings - No W2 = Suggestions?

8 Replies

Hi all - I'm wondering if anyone has banks/lender recommendations in DFW who can help here: 

I'm starting the search for my first property (thinking North Arlington area). My goal is to find a 3 bedroom SFR for less than 150k, live in one room, and rent/airbnb the other 2.

The issue however is that I'm newly self employed, so I don't have a W2 or income history. On the flip side, I have a good credit score (750+) and high cash savings. Since I'd prefer to use the cash for reserves + my business, I was hoping to find a long-term financing option for the purchase. Does anyone know a bank/lender recommendation who can help in this type of scenario? I'd like to avoid HML and short-term financing in general, and would be willing to put a 10-20% deposit if needed.

Thanks!

Hmm.

That is going to be tricky. And you will be buying this property for cash flow? 

@Antoine Martel - Yup, that's right. I would be living in one room but yea, even if I had to move out it should still cash flow.

By the way for some reason when I read my original post, a part of it is cutoff. Just in case it was meant to read:

*My goal is to find a 3 bedroom SFR for less than 150k, live in one room, and rent/airbnb the other 2.

Originally posted by @Abel T. :

@Antoine Martel - Yup, that's right. I would be living in one room but yea, even if I had to move out it should still cash flow.

By the way for some reason when I read my original post, a part of it is cutoff. Just in case it was meant to read:

*My goal is to find a 3 bedroom SFR for less than 150k, live in one room, and rent/airbnb the other 2.

 Okay. Got it.

So then I think good option would be the FHA loan. Now, I'm not sure that since you're newly self employed that they would be able to do that but that would be my best recommendation. Or else, since you said you had high savings. You could invest that $ and just buy the property with all cash.

Another option would be to rent out a place to live in. Use your cash to buy rental properties out of state and then use that cash flow to pay for your rent where you live. 

@Abel T. I know at least one lender in the Austin market who does high asset-low doc loans. DM me and I'll give you his contact. He may be able to point you to someone in DFW.

 @Abel T.   Depends on a number of things but I might know of a few programs that could help you. I recently did this for myself so I might be able to give a few hints. Connect with me and I will chat with you if you want. Full disclosure, I am not a mortgage broker and would not make any money on this. Just trying to help out a fellow BP'r.

Originally posted by @Abel T. :

Hi all - I'm wondering if anyone has banks/lender recommendations in DFW who can help here: 

I'm starting the search for my first property (thinking North Arlington area). My goal is to find a 3 bedroom SFR for less than 150k, live in one room, and rent/airbnb the other 2.

The issue however is that I'm newly self employed, so I don't have a W2 or income history. On the flip side, I have a good credit score (750+) and high cash savings. Since I'd prefer to use the cash for reserves + my business, I was hoping to find a long-term financing option for the purchase. Does anyone know a bank/lender recommendation who can help in this type of scenario? I'd like to avoid HML and short-term financing in general, and would be willing to put a 10-20% deposit if needed.

Thanks!

 I think we have different definitions of "high cash savings" and less than $150k. If you have high cash, I'm assuming at least $100k so that is plenty for a 40% no doc owner occupied loan. 10% is unlikely without higher interest rates given your lack of income proof.

@Antoine Martel - thanks, I could be wrong but my understanding was an FHA requires proof of income. I'll double check though. And you're right, my backup plan is to continue renting and use my future business cash flow to qualify in the future. But wasn't sure if there were other options available.

@Poem Turner - great thank you! I’ll send you a PM

@Bill Hamilton - thanks Bill! I’ll reach out, maybe there’s a program that fits well!

@Ronald Rohde - thanks, I think we have the same definition and my savings is more than $100k, but my ideal purchase price of $150k is separate and intentionally below my means. I was looking for financing options so I don’t have to tie up a ton of equity in a house purchase, and instead use that for business + reserves. I actually haven’t heard of no doc loans but that could be a great option! Thus far I had only seen long term financing options if you have proof of income. 

Originally posted by :

@Ronald Rohde - thanks, I think we have the same definition and my savings is more than $100k, but my ideal purchase price of $150k is separate and intentionally below my means. I was looking for financing options so I don’t have to tie up a ton of equity in a house purchase, and instead use that for business + reserves. I actually haven’t heard of no doc loans but that could be a great option! Thus far I had only seen long term financing options if you have proof of income. 

No problem, with 40-50% down, no documentation of income necessary, property just needs to appraise high enough. Owner occupied is good for interest rate, may only get a 5-15 year note though. If you want to do a hybrid HML, I know you can put your 20% down, have HML for another 20% and minimize that carrying cost...

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