Advice on how to move forward with low pre-approval number

[Wei Cho]

Hi everybody, I am new to the forum but have been an avid RE fan. I probably digested every book from BP and other great book recommendations mentioned on the podcast. My husband and I are looking to purchase our home in Los Angeles, CA, or home town. I started working fresh out of college 2 years ago and Daniel, my husband just started working a 1099 job about 4 months ago (also new graduate). We want to house hack using an FHA loan so we have 3.5%. However we're only getting the loan with my income because my husband 1099 is not bankable. We don't have any debt except that we're paying a car loan that it's not accruing any interests. Anyway. The pre approval letter says that I only qualify for $350k. Barely anything considering that median home price is $550k!!! There are only certain neighborhoods that we can buy and that's South Central LA (think the 90s riots in LA). It's definitely an area that is undergoing revitalization especially with subway projects and the new RAMS stadium being built close by. I've seen more and more fix and flips and property values go up. It's about the last affordable place in Los Angeles. Do you think we should wait to convert Daniel's income into a W2 (which is a possibility for 2018) or do you think investing in a formerly "ghetto" neighborhood a good idea/investment? We'd buy a duplex or triplex and we'd live in it. We're worried about the tenants it might attract. Thanks!