Financing for the Self Employed

[Stephanie Hay]

For about 2 1/2 years, I have been Self-Employed. According to my tax return, last year I broke even. While my income has increased drastically this year, I will still have some deductions. 

I've been thinking about finding a multi unit and living in one of the units to qualify for first time home buyer/owner-occupied FHA financing.

What is everyone's experience with investing as Self-Employed?

Would it be worth my time to get a part time job? Then there's that saying, "work smarter, not harder". 

A few people have approached me about wholesaling and flipping to get some capital first. 

Any advice or experiences is greatly appreciated! 

Thank you.

[Jean Bolger]

Hi Stephanie- I've always been self employed, and yes, getting loans can be a PIA. Most lenders will look at two years tax returns and average them, so last year is going to haunt you for a while. It may just take some patience. If this year is good, you may be able to find a lender sometime next spring who will who will look at your 2014 return and part of 2015 (this part wouldn't be tax returns, just income statements). You'd almost certainly need to find a lender who keeps their loans in house (a portfolio lender) to get them to agree to lend to you. These are usually small local banks and credit unions. Or, you can just wait, but I know that's frustrating.

Getting started as a wholesaler could be a big job, I think the idea that you can simply wholesale a few houses to get some quick capital is really not practical. (of course, you may have mad marketing and networking skills and could easily prove me wrong...)

Flipping without capital or experience is also not practical.

Your idea of an owner occupied multi is great. Owner financing is another thing to consider.  An ideal situation would be if you could find a "tired landlord" who wanted to keep getting income (from your loan payments) but no longer be responsible for the property (that would be yours!) 

good luck!