First Time House Hacking

[Nick Riddle]

Hello,

I hope you're all doing well! I wanted to reach out and get some advice from this amazing community. I'm a 20-year-old who owns a pressure washing business, and I'm really eager to take the next step in my financial journey by getting into multifamily property investment for house hacking.

Here's where I'm at: I've been self-employed for 2 years now, and while I love being my own boss, it also means that I have a lot of tax write-offs. Unfortunately, this has made it difficult for me to get approved for loans.

My goal is to make a move into multifamily property by the end of next summer, and I'm hoping some of you might have suggestions or insights on how to achieve this given my situation. Have any of you been in a similar spot? How did you overcome the challenges of being self-employed when it comes to financing real estate investments?

[Melissa Hartvigsen]

Hello @Nick Riddle,

I see a few options for you. 
1. Talk with a CPA and change your write offs to show more income, and do this for a couple of years. Then make your purchase with a conventional or FHA loan.

2. Is there a close friend or family member with excellent credit and a traditional w-2 job that can co-sign so you can buy now with a conventional or FHA loan?

3. Go "non-QM" or seek Private Money. Some lenders will use these terms interchangeably. These loans are great for self-employed folks because they can use your bank statement deposits instead of tax returns, and may count rental income for you to qualify. Be aware, they charge more on the interest rate (it will likely be 9% to 10%).

The benefit to option 1 and 2 is that interest rates are more attractive. The benefit of option 3 is that you can get this done on your own and as soon as you find the right property.

If you have not met a lender that you can talk to about non-QM options, use the BP directory for lenders. You can also make a post for your market asking for recommendations for lenders from the BP community there.

Best wishes,
Melissa

[Benjamin Sulka]

Nick,

Welcome to the site! 

Melissa made some great points and presented some excellent options. I personally like reaching out to close friends or family members and talking to them about what you are trying to do. This option isn't available to me personally, but everyone has a different situation. 

If you're really eager to get into this as soon as possible, consider going non-QM. Just do you due diligence and analysis considering the higher rates. 

Happy House Hacking!