How to pull money out of a home paid all cash with no job?

[Steven Lewis]

I purchased a condo all cash in 2014 as a buy and hold. I quit my full-time job and now do real estate full-time but don't have the two years as proof of income to pull the cash out of the home to buy my next property. The property is currently positive cash flowing with my tenant. What are my options? 

[Penny Clark]

@Steven Lewis, Yes you'll either have to wait until you acquire two years of experience at a full-time job or part-time job in order for a traditional lender to accept it as verifiable income. You can find a private lender who will underwrite you, but you'll still have to show a track record of consistent pay in your new field. If you use hard money, you will pay through the nose in interest rates and need to have a super hot property whose value guarantees the investment. I went through this income source challenge while transitioning from tutoring to guest teaching. I've learned the best answer to your question is to have MULTIPLE STREAMS of INCOME, whether it be 1099, passive partnerships, W-2, rental income, a small business or royalty income. That way, you are never dependent on one source, which could dry up if you get laid off, fired, or you quit.

 I currently do guest teaching, property management, rental income and real estate sales, I am co-owner in a corporate business, a caregiver and most recently, a blogger. As my real estate and property business are growing, I will do less teaching for the schools but use this skill to help educate my clients, and conduct PM classes for owners who want to manage their own rentals.  I do care giving for a family member with special needs, and have considered investing in a property to operate my own care giving home or help others who want to get into that business find homes that would work for this type of business. I'm part owner of a pest control company and so have helped build that business by referring PM clients and clients of other realtors. I'm currently developing a blog of my own geared for the accidental or first-time rental owner who wants to either manage their own properties or learn how to manage the property manager. 

Doing all these things keeps me from being dependent on one income source to qualify for financing. 

I know this doesn't help you solve your problem now, but while you are building your real estate career, decide on a couple of ways to generate income while working in your field. Be creative - offer to advertise a business by putting signs on your car as you drive around neighborhood streets; operate a staging or cleaning business for sellers and their realtors; act as a vacation rental host for out of the area owners who cannot do it themselves but would like their guests to receive the concierge treatment. I'm sure if you put your mind to it, you can think of some other options. The point is, limiting yourself to one source of income is well....limiting.

Good luck!