How to get financing w/ less than 1 yr of employment

9 Replies

Hello!

I'm looking to buy a 3-4 unit property in Philly, but having difficulty getting traditional financing due to me starting my own business last year. All lenders are saying I need 2 years of consistent income. I know I could get a hard money loan, but then I won't be able to refinance once I renovate and lease the place out, and I'll be stuck with a high interest loan till then.

I have three rental properties (in los angeles) that are netting me 120k (pre tax). I only started renting them as of May 2017, so even if I wait till 2017 taxes, it wont show all the income I'm making. The only other way I can think of is getting a co-signer.

Any other suggestions?

Thank you!

M.

I'm in a similar situation as I have no W2 or proof of income.

I have found that there are a lot of lenders who work with people in our situation.

You're correct we can't qualify for conventional lending (Fannie/Freddie) without W2 or a cosigner.

However you should look into commercial/porfolio lenders. 

They base the deal more off the DSCR and the overall deal itself rather than your personal financials.

You can also use your rental income from your current properties to help qualify.

Check with your local banks and credit unions as well.

Did you buy your current properties all cash? Or how did you finance them?

@Brian Garrett that's a good point, thanks. I'll look into that.

Yeah, bought them with cash, and plan to refi...when I can.

Originally posted by @Michael W. :

@Brian Garrett that's a good point, thanks. I'll look into that.

Yeah, bought them with cash, and plan to refi...when I can.

You shouldn’t have a problem refinancing now. 

Originally posted by @Michael W. :

Hello!

I'm looking to buy a 3-4 unit property in Philly, but having difficulty getting traditional financing due to me starting my own business last year. All lenders are saying I need 2 years of consistent income. I know I could get a hard money loan, but then I won't be able to refinance once I renovate and lease the place out, and I'll be stuck with a high interest loan till then.

I have three rental properties (in los angeles) that are netting me 120k (pre tax). I only started renting them as of May 2017, so even if I wait till 2017 taxes, it wont show all the income I'm making. The only other way I can think of is getting a co-signer.

Any other suggestions?

Thank you!

M.

I take it from your post you haven't purchased the Philly property yet. Here's a link to one of BP's own that offer some terrific ways to go about getting seller's assistance. One of these are sure to work. I follow him and just received notification of the latest blog post. If you need more details send a colleague request to @Charles Parrish

https://www.biggerpockets.com/blogs/7460/67475-som...

Kudos,

Mary

Michael, a mortgage broker could be of great value to you. Unfortunately, you are stuck in a tough position (residential loan without lots of taxable income). Property with 5+ units can be acquired using a commercial loan which is easier to get because it is based less on your personal finances. Good luck!

@Michael W. , what kind of lenders have you reached out to so far?  In your situation, a smaller local lender may be a better choice vs. a regional bank (M&T, Capital One, etc.).  I would also suggest taking a look at a credit union, a lot of times they are more flexible in terms, especially if you're able to offer recourse on the other properties.  A commercial loan may have less desirable terms than a residential loan, but it is certainly an option if the property has strong financials.  

I'm a commercial mortgage broker in Philadelphia, if you don't mind sharing more details about the property, I can forward you on to some of my lending contacts.

Hi @Michael W.

Welcome to BP

Thank you @Steve Babiak

My immediate answer would be anything could be possible if credit and income are there. Would need a one on one to understand current portfolio and asset type etc on the property in Philadelphia.

Let me know if you have any questions.

Regards.

Joe Scorese

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