Financing & tips for 1st time investor looking at preforeclosures

[Sarah Jukes]

Advice needed, in a Catch 22 situation. We are trying to find a house to flip. The market here in Coastal Central CA is crazy and most homes sell fast. Couple of questions. We have applied for a non qualifying loan because we are self employed, and net income on tax returns low. (husband is a licensed General Contractor, specializing in renovations/refurbs).  However we own our home, no debt, no mortgage etc, valued about 1.2 million$. Are these non Qual loans a good idea? 

Any tips on finding good flips in a market where people are fighting over the lower priced homes (meaning under a million)? Is it even realistic? We have a Realtor door knocking on Preforeclosures, this is her typical method. But seems to be alot of No's and doors being slammed in her face, although this is how she's made her career. She sent me Affidavits of Death to pick out good addresses but feels rather uncomfortable. However I know once home listed it's not a good investment.

Alternative is to find a home and rent it out. However we'd like the mortgage to be covered by the rent, which will be tough to find. rents are high here, but the mortgage will be too. We only have about 10% down. plus it wouldn't give us a chunk of cash that a successful flip would (if we find one)

Other option is husband takes a job and the pay stub will make it ALOT easier to get a regular mortgage, BUT he won't then have time to fix up the flip, unless he uses the job to just get the mortgage.....We are mortgage free because he fixed up our previous homes and increased the values a lot, although at the time we planned to make them our home, not flip, but we still did well. We will not be selling our current home anytime soon.

Am I wasting my time, or will something come from this, how to make this all more effective? Thanks so much.