All Forum Posts by: Sasha Mohammed

round 6 and growing!! lets get one going in OC soon too :)

this is a toughie. hard money specifically is equity-driven, meaning they'll likely want 40%+ down to even entertain the deal. additionally, land without improvements is often very inexpensive (relative to land with improvements), usually pushing below a threshold which makes sense for a hard money lender. 

if you're not intending to build right away, then i think you'll have the best luck with private money instead of hard money. usually higher leverages than hard money, and more negotiable terms.

if you are intending to build on it pretty right away, a ground-up construction loan could work, but those will typically require some ground-up construction experience (on title on other ground-up deals), or an extensive portfolio of heavy rehabs/ rentals/ strong liquidity. those will give you acquisition monies (to buy the land) and build monies (to build the improvements).

lol happy to help. knowledge is powerful. 

not 2 months, no. usually a letter will let you get in for underwriting/ qualifying, and a 2-week pay stub required before closing. 

every lender that does fannie/ freddie will use standard fannie/freddie guidelines, but a lot of them have "overlays", which are additional guidelines imposed by their investors. check with your preferred mortgage professional to find out how they will handle things for your speicific scenario. 

There's soooo much i want to spew out but this is not the forum post for that. just one last tidbit, since it sounds like you're looking for a live-in multi-family, FHA is going to be tough due to added guidelines on 3 and 4 units. stick to conventional.

TBH i think your best bet would be to have that 10% - 15% 'jr. debt' be from cash-out on another property, if it's an option. Leveraging one to put "cash down" on another is not a bad play. you're effectively financing it, just financing it in a way that doesnt look like you're financing it.

transunion offers one for free to you. once you've selected your prospective tenant, you submit their basic info (name, email, etc) into the TU site, and it asks what services you'd like: credit, background, etc. 

it will send them a link to complete the sensitive info like socials and such, and then charge them for the credit/ background check. or if you'd prefer to pay for it, you can select that option as well. 

ive been using this, pretty great so far! if someone is not willing to pay the $46 or whatever, they're likely not serious, or have something to hide. 

Hi Lynn, 

Maybe i'm making a leap here, but it sounds like there was a little mistake made during the underwriting on your loan, making it currently unsellable by Rocket on the secondary market. They're likely trying to fix this by asking for a statement on your 401k so they can include it in your file, and make the investor happy... likely it was a reserves piece that was overlooked, a typo, who knows. Its tough to say without having any frame of reference for your file, but if its not too much trouble, I would provide it and let them just check a box. 

Mortgage lenders have to sell these loans on the secondary market to avoid massive interest charges to their short term (warehouse) lines of credit, and allow for the liquidity needed to continue lending to the next guy... its kind of just how their world continues to go around. its rare these types of things happen, but it does happen. 

Hi Kieran,

As most have mentioned, DSCR is a great way around the income qualification piece, but you couldn't live in the property, and the down payment requirements would be larger than you're looking for.

Most non-qm options for self employment would also require more than the minimum 3%/ 3.5%/ 5% down. 

Really, the only way to get the low-low down payment options you are seeking would be with a traditional full-doc, fannie/ freddie/ FHA loan product. However, understanding the guidelines might help you.

When it comes to a 2 year history of employment, this is really only required for self-employed. If you were to go get a full-time (40 hours per week) W2 job tomorrow, you could effectively immediately use that income to qualify. Not sure if this is an option, but throwing it out there just in case. We do have to DOCUMENT what you've been doing for the previous 2 years, but conventional guidelines would allow for immediate use of full-time W2 income in most cases. 

If the goal is to stay 1099, I would spend a few minutes with a mortgage professional, and understand how the schedule C (likely how you're filing) is calculated by an underwriter. The trouble is that your CPA and we (as loan pros) have different goals in mind -- i want most income to qualify you, your CPA wants least income to save you in $$ paid to the IRS. understanding the requirements will help you file your taxes in a way which might be conducive to qualifying. Maybe forgoing some of your deductions one year could really open doors for you. Depreciation is another good one, as it helps reduce your tax liability, but should be added back in to your income calculations. and don't forget to track your mileage! we can give you credit back for business miles on your car. 

Im sure this wasn't the answer you were hoping for, but its a battle many of us have fought when trying to build a business and buy a home. Hope it brought some value to you regardless.

@Jay Hurst is correct, and i agree with his sentiments its terribly sad how many LO's don't know their income calculations. Depreciation should be added back in if you're doing a full-doc loan using schedule E rental income to qualify. 

its possible you're using a loan officer who simply doesn't know. I didnt' find anywhere in your post where you indicate the lending institution, but I will say, a lot of lenders (mostly banks or credit unions) will "overlay" standard guidelines. what that means is that they will impose more stringent guidelines above and beyond the standards. This COULD be your hurdle and why they are not allowing depreciation to be added back in. 

You can ask the LO if its an "overlay", although they may not know. I would recommend you reach out to a Brokerage or even (dare i say it) a direct lender over a bank / credit union. You'll simply land with more experienced professionals who ONLY do mortgage. 

Hope this was helpful!

Yes, I agree 100% I just wanted to give a different perspective. it is posssssible, albeit highly unlikely for sure; and it does require some digging and due diligence to get to the bottom of it. i have DSCR lenders in the 7's now, a private lender COULD provide rates in the 6's if they wanted to.

"unlikely" or "misleading" vs "absolutely false" are not the same is all i'm trying to say. spurr some thought and understanding as opposed to just shutting it down altogether, and provide some education as to why these ads tend to all use the same misleading verbiage so that individuals can discern for themselves.