Where to get money

[Christopher Sica]

Hey All,

So I have been looking at property here in Austin for a while. I have figured out that I am ready to purchase my first duplex and have found a few that cash flow and are in areas I consider sound.

I have a problem. I am 28 years old, have been self employed forever, and have never borrowed money. So I have no credit. I got a credit card but its brand new and so I am just get credit started. I am just not sure what to do next. I applied for the tradition FNMA mortgage and was denied.

I have plenty of cash, but banks don't care about that. They want to see my tax returns, which is fair of them; however, as a small business, i have written off as much as I could for the last few years and it looks like I only make about 40k a year.

I am planning on a buy and hold (for at least a decade) strategy and unfortunately, because Austin is relatively expensive/ bc I'm not flipping, Hard Money just will not work (it kills the margins in a violent and gruesome death). I have been given the suggestion of going and meeting with portfolio lenders, of which I have found a list here on Bigger Pockets. I have been told to consider finding a rich friend and getting them to cosign.

Finally, about half of the multi fam properties here in Austin have been paid for in cash this year so far, so I have considered just using all of my money to get into my first house and then pulling equity from it in a year or two. But this seems like a huge waste of reserves I have built up so I will have a cushion for vacancies/repairs/etc.

I don't know what to do. Do i need to just leave Austin alone and go to some cheap city and buy cheap multi's there or do I tough it out here and hope to find a portfolio lender or do I try to bribe a rich friend or do I use all my cash to get into something I can refi later.

Any suggestions would be greatly appreciated.

Chris