Can&#x27;t qualify for a loan but have the money

Ben ScottPro Member

Property Manager · Oklahoma City, OK · Member since 2019 · 574 posts · 350 votes

4y

Have you filed tax returns the last several years? If not, maybe an owner-finance would be a good fit. Work you sphere of influence and see if there is anyone (tired landlord?) with a paid off property that likes the cash flow but hates the headache of maintenace and tenants.

Catherine Coy

Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes

4y

<< You can use a DSCR [debt service coverage ratio] loan that qualifies you based on the rental income of the property. >>

To qualify for a DSCR loan, most lenders require that you own a primary residence.

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Joshua JanusBusiness Member

Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes

4y

You could possibly file the previous 2 years' tax returns with a tax professional in order to qualify for a conventional or FHA loan. I am not a tax professional but I did this with my taxes last year as I was also self employed.

2 Reply

Brandon GoldsmithBusiness Member

Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes

4y

I would look into private lending, hard money or seller financing options @Brian Wilson

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2 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

You can attempt to get a 'bank statement' loan, based on the money that has run through your account for the past year....couple this with a DSCR loan perhaps....

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Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

4y

Originally posted by @Brian Wilson:

I am a 19 year old who lives in Columbus, Ohio. I have my own landscaping company and have accumulated some money that I want to invest somewhere and make it grow. I would like to buy a multi-family property with an FHA loan and rent out the other side and live for free. I have not yet made my business an LLC so for the last 5 years everything I have been paid was "under the table." With that being said, I have no work history technically. Therefore, I cannot qualify for a loan. No one will co-sign with me since it will be my first investment property and I'm still learning. I've watched hundreds of YouTube's and podcasts and just read "Rich Dad Poor Dad" and "Rental Property Investing." I continue to do more research every day. I feel I have a good understanding of the rental property game and the money to get into it but no way to get a loan. Any suggestions?

I recommend you go out and find a really good deal here in Columbus, Ohio. If you do that then the partners will come with the money. That is what I did when I started my 1099 job and was not lendable.

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Catherine Coy

Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes

4y

<< You can attempt to get a 'bank statement' loan, based on the money that has run through your account for the past year....couple this with a DSCR loan perhaps... >>

The two loan programs can't be combined.

Stephanie P.Pro Member

Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes

4y

DSCR loans are for non-owner occupied properties.

A bank statement product would work for a primary residence.

Todor Ialamov

Real Estate Agent · Burlington MA · Member since 2018 · 113 posts · 142 votes

4y

Find a partner, who does not have the money but can qualify for a loan.

2 Reply

Chad S Buchen

Rental Property Investor · Frederick, MD · Member since 2021 · 5 posts · 1 vote

4y

@Stephanie P. Could you share some details of how to qualify for this type of loan.

Theo Stone

Member since 2021 · 1 post · 0 votes

4y

@Brian Wilson

If the property has a lot of equity ask about owner financing. If there isnt a lot of equity look into taking the loan over subject to. Even if there is a lot of equity you could still do sub-to but you would need more cash in the deal. You could also look for a hard money lender for the difference.

Evan O'Brien

Sayville, NY · Member since 2021 · 126 posts · 34 votes

4y

@Brian Wilson you could explore utilizing creative financing options such as seller financing, lease options or partner with someone who can qualify for a loan while you provide the capital for the down payment/closing costs. It can’t hurt to reach out on BiggerPockets to see if anyone on the forums is looking to partner on deals in the area you’re interested in investing in

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

4y

Honestly? get out of the shadow economy and start putting everything "on the books" You can refile for the last 2 years taxes so you have a tax history- this will allow you to get a loan. you do NOT need an LLC to buy a house LLCs make buying a pain... just get good insurance (you should have insurance now for your biz so just ask your ins broker what you need) . The whole LLC thing must of been thought up by a lawyer ;) (adding you might consider a LLC for your landscaping biz if you hire help)

You are young, do NOT get a hard money loan... do not get into some complicated situation where is one thing goes wrong you will loose it all...

Rob Golob

Investor · Valparaiso, IN · Member since 2015 · 84 posts · 47 votes

4y

Funny no one has mentioned the problems with tax evasion.

Sylvia B.

Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes

4y

Originally posted by @Rob Golob:

Funny no one has mentioned the problems with tax evasion.

That was my first thought on reading the OP.

@Brian Wilson
My first suggestion is to delete this post. You have admitted to tax evasion in a public forum. Not smart.
Next, work on your ethics. You are still a teenager, and that's a time for mistakes - we've all been there. Learn from those mistakes. Think about the kind of businessman you want to be. Do you want a reputation as an honest, trustworthy person, or are you just concerned about making money without considering anyone else? Set a standard for yourself, and then measure your actions against that standard.

Nitzan Mosery

Investor · FL · Member since 2019 · 42 posts · 17 votes

4y

Brian, look for hard money lenders. they usually look at the property more so than the investor.

once you own the asset for several months and can show income from the asset you might be able to refi..

Kyle Woodruff

Rental Property Investor · Rhodes, MI · Member since 2021 · 32 posts · 6 votes

4y

@Brian Wilson

I would listen to Pace Morby on YouTube. The guys a genius with creative financing. All sellers think they want all cash offers, your job is to convince them they really don't. If someone is wanting to get 100k for a property and an "all cash" buyer comes in at 100k. The seller initially thinks how cool it is that they got asking for the property. But after closing cost, title fees, and waiting around for inspections, appraisal, etc. They may come out with only 85k.

You offer them the 100k but then tell them instead of paying closing costs and going through a buyer with a bank, they become they bank, get a good down payment, collect interest for however long you set your balloon payment, don't pay closing costs, and don't pay on the big capital gains taxes right away.

They now have there asking price of 100k earning them money with the interest, don't have to pay big taxes on the money they earn, and will probably end up getting over 115k depending on when you pay off the balloon.

Everyone wins!

If it's a subject to deal then you can take over their existing loan and improve their credit while they also get paid for the sale of the property.

Nitzan Mosery

Investor · FL · Member since 2019 · 42 posts · 17 votes

4y

how much are you looking to borrow? what are the numbers?

can you send me the info?

Kevin Romines

Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes

4y

I double checked my investors guidelines. You must have proof that you are self employed as the bank statement loan are only for the self-employed.

You can do a bank statement loan on Primary / Second Home / Investment property of 1-4 unit. Bank statements are either 12 or 24 month of either personal or business bank statements. The reason you can go 24 month is that it could give you a higher average than the last 12 months, so you decide.

If you use personal bank statements then they will average 100% of all your normal deposits and divide that by 12 or 24 months to determine your monthly/annual income. If it is business bank statements, they will average 50% of all deposits and divide by 12 or 24 months to determine your income.

You can do this loan today, so long as you ran the money through your bank accounts. Mattress money will not fly!!!

I hope this helps?

Catherine Coy

Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes

4y

Brian Wilson, try this...

At Silver Hill Funding, LLC, you can take advantage of our to lock in deals for your non-bankable clients.

It's the ideal solution for those borrowers who can't provide tax return documentation. Instead of reviewing tax returns or bank statements, our team will simply focus on the FICO, LTV, and 3rd party consumer credit information to approve your best-credit commercial clients.

Here’s a quick look at our guidelines:

Loans from $100,000 - $2 million
Terms: 5-Year ARM or 30-Year Fixed
Purpose: Purchase, Cash-Out, R/T Refi
Documentation: No tax returns, bank statements, or operating statements*
Occupancy: Investor & Owner-Occupied
Max LTV: 75%
Min. FICO: 700
Min. DSCR: 1.0x

Go online and find your nearest Silver Hill Funding office. It's wholesale only, so they'll refer you to a loan originator in your area.