Lending Advice, 2 years of tax returns

[John M.]

Hello,

I am a small business owner who is in the process of shutting down one business and building a new one.  I also have 3 properties that are cash flow positive and humming along that I purchased about 2 years ago. My previous business has been good and healthy, with it being in the black for several years.

This year my corporate financials continue to be in the black, however I haven't taken a paycheck.  I've been living off my savings. My goal is to purchase more investment real estate next year, however I'm faced with a dilemma of possibly not looking the best to lenders. I'm looking at my options as:

1) Take a paycheck this year, which would put me at a loss on paper for one of the corporations but I would have a healthy W-2

2) Don't take a paycheck so I would have almost no W-2 earnings this year, but I would be in the black on my corporate financials.

Of course there's "make more revenue and profit", working on that :) But if I'm forced with option 1 or 2, do any lenders or RE investors out there have an opinion on what would look more favorable to them?

Thanks!

[Chris Mason]

Originally posted by @John M.:

Hello,

I am a small business owner who is in the process of shutting down one business and building a new one.  I also have 3 properties that are cash flow positive and humming along that I purchased about 2 years ago. My previous business has been good and healthy, with it being in the black for several years.

This year my corporate financials continue to be in the black, however I haven't taken a paycheck.  I've been living off my savings. My goal is to purchase more investment real estate next year, however I'm faced with a dilemma of possibly not looking the best to lenders. I'm looking at my options as:

1) Take a paycheck this year, which would put me at a loss on paper for one of the corporations but I would have a healthy W-2

2) Don't take a paycheck so I would have almost no W-2 earnings this year, but I would be in the black on my corporate financials.

Of course there's "make more revenue and profit", working on that :) But if I'm forced with option 1 or 2, do any lenders or RE investors out there have an opinion on what would look more favorable to them?

Thanks!

 Hi John,

Unfortunately, without all of your federal tax returns, personal and business, all pages, and all schedules, no one can answer this with any reliability. However I will point out that "W2!" is not a magic word, when it comes to self employed persons - erase that notion from your mind.