Documenting income from rental properties for future financing

[Ryan Pozzi]

Hello again, Forums! Our first deal is in the books - a SFR that will go on the rental market after a few months of touch-ups. After going through the cash vs. conventional financing debate, I chose to finance to spread our cash across more deals. Unfortunately, we've been self-employed in a non-real estate industry for a LONG time now and we couldn't document our income in a way that was sufficient for our lender - so we did a cash deal instead.

I thought the equity in that property and in the home we own outright (about $256,000 in total equity) would be enough to reset the conversation for our next deal, but our lender says existing equity will always be overshadowed in our situation by documented income (or lack thereof.)  That's fine, I guess, but I'd like to work my way back to financing so that we can buy more deals with less cash investment.  Has anybody had success getting their first few properties cash-flowing and then documenting that as sustained income for conventional financing on a new deal?  The best my lender would tell me was that it might work.  I'm hoping success stories for this approach come pouring in.

Feel free to tell me if I'm over-complicating this beast.  Thanks in advance!