Eager to start REI

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Eager to start REI

Hima Malini
Boston, MA · Member since 2026 · 1 post · 1 vote

Hi

I'm late to the REI game. I have had very unsteady income as a freelancer. I'm planning to get a W2 job in this rough market because I'm getting how important that is to secure FHA & conventional loans. In summer 2027, I'll have access to about $200-500K. But I won't have 2 years of W2s by then but need to begin my REI journey because I'm not getting any younger. I've been watching tons of BP podcasts (like Neo in Matrix downloading various software on martial arts). BUT I know that until I actually DO IT, it matters little how many I watch. I have done some renovations (both overseeing trades--in hindsight as a general contractor), did some property management & some tiling, rehabbing furniture to customize for these renovations. Anyway, I loved the rehab work to seeing a space really transform into a fully functional & aesthetically modernized home. I'm scanning MLS to look at some markets so that when the time comes, I see what a good deal might be. Does anyone have suggestions for how I should move forward with no W2s but a good chunk of cash to put into buying a place (most likely a duplex-quadplex)? I likely will know no one in any of these markets so will need to build my team in advance.

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  • Jimmy Samaha
    Staten Island, NY · Member since 2013 · 99 posts · 36 votes
    17h

    Having the cash actually gives you more options than people think. Without 2 years of W2s or 2 years of freelance tax returns, a conventional loan is going to be tough, but a DSCR loan qualifies off the property's rent instead of your income. Expect 20 to 25% down and a rate maybe 1 to 1.5 points higher than conventional, so with 200 to 500k you could buy a 2 to 4 unit and still keep 6 months of reserves. Another route is buying with cash, getting it rented, then doing a cash out refi after about 6 months to pull most of your money back out for the next one.

    If you file as a freelancer, some lenders will also do 12 or 24 months of bank statements instead of W2s. Talk to a couple of lenders now so you know what your tax returns need to show by next summer.

    For the team, pick the market first and spend the next few months learning it before the money is ready. Find a local agent who owns rentals there, a property manager, and an inspector, and ask the PM what rents and turnover really look like on the specific streets you're considering. Your rehab and GC background is a real advantage, just remember you won't be there to watch the crew, so line up someone local you trust to walk the job for you.

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  • Matthew MorrowBusiness Member
    Investor · PA - NY - NJ · Member since 2019 · 775 posts · 266 votes
    11h

    @Hima Malini welcome. The rehab and tiling background is going to help more than you'd think. You'll walk into a house and actually know what you're looking at. Watching the MLS is a good way to learn, and I'd pay attention to what things actually sell for, not just what they're listed at. On the W2 timing, I'd talk to a lender now so you know exactly what they'll want to see by next summer. Best of luck getting started.

    [email protected]484-791-6200
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  • Dan NelsonBusiness Member
    Real Estate Broker · Chicago and Kansas City · Member since 2016 · 106 posts · 96 votes
    10h

    Hima, cash plus real rehab skills is a strong place to start. A few things from the buying side.

    1. Decide early if you will live in the building. That one choice changes the loan. On a 2 to 4 unit you live in, a regular loan can go as low as 5% down once your income history qualifies. One you don't live in usually takes 25% down. With $200K to $500K, the smallest down payment isn't the point. The cash you keep becomes your rehab money and your cushion.

    2. Your tile and contractor background is your edge. Look for the dated building on a good block, the one other buyers skip because of the kitchen. You can already see what it becomes.

    3. When you interview agents in a new market, ask one question first: what do you own? Someone who owns small buildings will answer in seconds.

    4. Practice now. Pick three listings a week and write down what each unit would need to rent for to cover the payment. By next summer you will spot a good one fast.

    You are closer than you think.

    [email protected]773-295-1751Podcast Guest on Show 2 “Slam Dunk” Small Multifamily Deals in 2023 (and Where to Find Them)
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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 518 votes
    8h

    If an owner occupy investment property, and you can't qualify for a conventional loan, you could do a bank statement or some other kind of non qualified mortgage (non-QM), not conventional loan. If you can qualify with W2s, you could do a conventional loan. An owner occupied loan will be calculated based on your personal income and your debt to income (DTI) ratios. How it's calculated depends on the type of loan program.

    If a non owner occupy investment property, you can use a DSCR loan which will be structured based on the actual or projected property rent, not on a borrower's personal income or DTI ratios (beyond the ability to make the down payment for the property).

    All types of loans will be calculated based on your credit score and loan to value (LTV) will be factors as to what the rate ends up being. Happy to connect to discuss further.

    [email protected]818-770-0340
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  • Ana Cortes
    Real Estate Broker · Chicago, IL · Member since 2026 · 7 posts · 0 votes
    8h

    Hi Hima, welcome! You've already gotten great advice here, but I wanted to share more about the opportunity that you might have being self-employed.

    We have an entrepreneur program for freelancers and self-employed investors. It qualifies you on your last 12 months of bank statements, with no tax returns and no W2s required. Your freelance deposits already show your income, so you may already be on track instead of starting over with a new job next year. You are correct that a W2 would open doors for FHA and conventional loans, but also keep in mind that those are strictly based on personal taxes, income, and you need proof of 1-2 years of employment history.

    A DSCR loan is another option to explore if you're looking to rent out your property since the building's rents covers the payment on their own. It qualifies on the property's rent instead of your personal income. Either way, you can buy a rental without W2s.

    A few things you can do now so you're ready by summer 2027:

    1. Run all your freelance income through one account, ideally a separate business account. Clean, consistent deposits make the bank statement review much smoother.

    2. Be ready to show where the $200–500K comes from, whether it's a sale, an inheritance, retirement savings or something else. Lenders will want to see that the money is yours and where it came from.

    3. Keep a good chunk in reserve. With your rehab background, money set aside for renovations can add more value than a bigger down payment.

    I'd be more than happy to connect with you if you'd like to chat more.

    https://gwcfinancial.com/ana-cortes/

    Take care!

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  • Hossein Sharifi
    Investor · Member since 2023 · 133 posts · 66 votes
    8h

    @Hima Malini With that much cash, DSCR is probably your cleanest path, and it doesn't care about W2s. The lender checks whether rent covers the payment, usually 1.0-1.25x. Rough example: a $400K fourplex renting $3,600 total, 25% down at 7.5%. P&I on $300K is about $2,100, plus maybe $700 for taxes and insurance. $3,600 against $2,800 is about 1.29x, which clears most lenders. Expect 20-25% down, around 6 months of reserves, and a rate roughly 0.75-1% above conventional.

    One thing to weigh: if you'd live in one unit, waiting for the W2 history opens FHA or 5% down conventional, which is a lot less cash per door.

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  • Sal Bossio
    Member since 2026 · 4 posts · 0 votes
    4h

    Hima, the big thing on FHA and conventional is cash doesn't count as income. They want job history you can document, and the cash mostly covers down payment and reserves. So with no W2s by summer 2027 those two get tough unless you pick up a job before then.

    If you don't, look at asset depletion (some lenders call it asset utilization). Its a non-QM loan where the lender takes your liquid assets and divides them over a set number of months to come up with a monthly income number. With 200-500K that can actually work for an owner occupied duplex to quad. Rate is usually higher than FHA though, and every lender does the math a little different so ask.

    Stuff to do now: keep the money in one or two accounts and don't shuffle it around, every big deposit needs a paper trail. And talk to a lender a few months before you start shopping, not after you find the place.

    fwiw I'm a loan officer with Barrett Financial, just sharing what I see on the lending side.

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