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Hello all, feeling stuck.
Hey guys, I am seeking some guidance if possible, and hope this is the right place. I currently have one STR near Yellowstone NP and have about 200k in equity on that property. I am seeking options to buy another rental property but I don't have a W2 job or a lot of capital to fund buying another property. The deed to my rental property has been transferred to my real estate LLC and has 2 years' worth of income on that. Does anyone have any advice or think a certain solution would be best for me? I did talk to a lender about re-financing my property but she advised me not to do that because I would have a much higher interest rate. I just really want to get another property while the bidding wars are no longer a thing. Thanks for taking the time to read this, and I appreciate all of you here on BP.
There are a few options you can consider to fund the purchase of another rental property without a W2 job or a lot of capital.
1. Look into using alternative financing methods such as hard money loans or private money loans. These types of loans often have higher interest rates but can be a good option for those who don't qualify for traditional loans.
2. Consider using your equity in your current rental property to get a cash-out refinance loan. While the interest rate may be higher, it will probably be less than using a hard money loan.
3. Consider alternative investment strategies such as flipping properties or wholesaling properties, which can provide a cash infusion and allow you to build up a down payment.
4. You could try and find someone who would seller finance a property to you as well.
Ultimately, the best solution for you will depend on your individual circumstances and financial goals. It may be helpful to speak with a financial advisor or real estate attorney to explore your options and make the best decision for your situation.
Hi Carson! There is a category of loans called non conforming (AKA non-QM). This category has great options for investors, self employed, or those with DTI issues or tax write-offs road blocking them from getting a pre-approval. DSCR (debt service coverage ratio) is one of the products. With DSCR you qualify based on the asset rather than the borrower. There are also products like bank statement loans and asset based loans. If you want to send me a PM I'd be happy to go over your info and see if one of these could be a fit. This category also allows you to close or refi within an LLC!
Best of luck.
-Kristen
#3 All Forums Contributor
- Investor
- Virginia
@Carson DuVall
Looking at this differently. Why not get a w2 job and start saving money which would qualify you for another loan ?
@Carson DuVall as @Chris Seveney one option is to get a W2--which can unlock a lot of other options...
Another option (that you could combine with getting a W2) is to do a house hack of a single fam or small multifam property (I'm a huge proponent of house hacking--partly because it can simultaneously increase your income while decreasing your expenditures, thereby "unlocking" other investment opportunities that you might not otherwise have access to--which is the fundamental recipe for building wealth).
For instance, when I was younger, I house hacked a new property almost every 12 months for years on end. I started off living in the cheapest rooms in the properties to maximize my returns, but as my cashflow and net worth increased, I gradually moved up to occupying nicer spots in the properties. I eventually got my own place, but I was always careful not to let the increases in my expenditures outpace the increases in my income... House hack a property every 12 months, and in 5-10 years you can be sitting on a pretty solid portfolio.
Regardless of what you do, talk to an experienced lending pro who can help you better understand what lending options are available--and, importantly--what lending options could be available, given hypothetical changes to your finances (for instance, what options could be available if you got a W2 job paying $X/year). This will give you a better sense of what's possible, and what paths might work best for you.
Good luck out there!
Quote from @Michael J.:
There are a few options you can consider to fund the purchase of another rental property without a W2 job or a lot of capital.
1. Look into using alternative financing methods such as hard money loans or private money loans. These types of loans often have higher interest rates but can be a good option for those who don't qualify for traditional loans.
2. Consider using your equity in your current rental property to get a cash-out refinance loan. While the interest rate may be higher, it will probably be less than using a hard money loan.
3. Consider alternative investment strategies such as flipping properties or wholesaling properties, which can provide a cash infusion and allow you to build up a down payment.
4. You could try and find someone who would seller finance a property to you as well.
Ultimately, the best solution for you will depend on your individual circumstances and financial goals. It may be helpful to speak with a financial advisor or real estate attorney to explore your options and make the best decision for your situation.
Thanks for your input, @Michael J.. Those are great options and I appreciate you showing some guidance on this. The seller financing option would be a good fit for me I think, ill look into that for sure. Never thought about a financial advisor either.
Quote from @Kristen L Garner:
Hi Carson! There is a category of loans called non conforming (AKA non-QM). This category has great options for investors, self employed, or those with DTI issues or tax write-offs road blocking them from getting a pre-approval. DSCR (debt service coverage ratio) is one of the products. With DSCR you qualify based on the asset rather than the borrower. There are also products like bank statement loans and asset based loans. If you want to send me a PM I'd be happy to go over your info and see if one of these could be a fit. This category also allows you to close or refi within an LLC!
Best of luck.
-Kristen
@Kristen L Garner, I didn't know there were those types of loans at all. This is great, and I appreciate that info a ton. I would be very interested in these options and will send you a pm. Thank you for the response!
Quote from @Chris Seveney:
@Carson DuVall
Looking at this differently. Why not get a w2 job and start saving money which would qualify you for another loan ?
@Chris Seveney , I have considered that. I am a self-employed general contractor and my business has money put aside but I don't have enough personally for a large down payment if that makes sense. I just couldn't work for someone else at the moment as I have some larger projects ongoing at the moment.
Quote from @Leo R.:
@Carson DuVall as @Chris Seveney one option is to get a W2--which can unlock a lot of other options...
Another option (that you could combine with getting a W2) is to do a house hack of a single fam or small multifam property (I'm a huge proponent of house hacking--partly because it can simultaneously increase your income while decreasing your expenditures, thereby "unlocking" other investment opportunities that you might not otherwise have access to--which is the fundamental recipe for building wealth).
For instance, when I was younger, I house hacked a new property almost every 12 months for years on end. I started off living in the cheapest rooms in the properties to maximize my returns, but as my cashflow and net worth increased, I gradually moved up to occupying nicer spots in the properties. I eventually got my own place, but I was always careful not to let the increases in my expenditures outpace the increases in my income... House hack a property every 12 months, and in 5-10 years you can be sitting on a pretty solid portfolio.
Regardless of what you do, talk to an experienced lending pro who can help you better understand what lending options are available--and, importantly--what lending options could be available, given hypothetical changes to your finances (for instance, what options could be available if you got a W2 job paying $X/year). This will give you a better sense of what's possible, and what paths might work best for you.
Good luck out there!
@Leo R. that is pretty cool that you were able to do that every 12 months and I think that's a good way to build a portfolio. I think I need to talk to an experienced lender and that's what I'm missing, the lenders that I have talked to were not open to helping me creatively figure this out. I appreciate your response and I will look at these options, thanks!
Quote from @Carson DuVall:
Hey guys, I am seeking some guidance if possible, and hope this is the right place. I currently have one STR near Yellowstone NP and have about 200k in equity on that property. I am seeking options to buy another rental property but I don't have a W2 job or a lot of capital to fund buying another property. The deed to my rental property has been transferred to my real estate LLC and has 2 years' worth of income on that. Does anyone have any advice or think a certain solution would be best for me? I did talk to a lender about re-financing my property but she advised me not to do that because I would have a much higher interest rate. I just really want to get another property while the bidding wars are no longer a thing. Thanks for taking the time to read this, and I appreciate all of you here on BP.
SUBTO & SELLER FINANCING !
look into it, you won't look back, you dont need a W2, just do the work in finding these types of deals.
also YouTube Pace Morby, he is the goat of Creative Financing ! :D
#3 All Forums Contributor
- Investor
- Virginia
@Carson DuVall
Create an s Corp pay yourself a salary and be an employee.
Quote from @Carson DuVall:
Quote from @Leo R.:
@Carson DuVall as @Chris Seveney one option is to get a W2--which can unlock a lot of other options...
Another option (that you could combine with getting a W2) is to do a house hack of a single fam or small multifam property (I'm a huge proponent of house hacking--partly because it can simultaneously increase your income while decreasing your expenditures, thereby "unlocking" other investment opportunities that you might not otherwise have access to--which is the fundamental recipe for building wealth).
For instance, when I was younger, I house hacked a new property almost every 12 months for years on end. I started off living in the cheapest rooms in the properties to maximize my returns, but as my cashflow and net worth increased, I gradually moved up to occupying nicer spots in the properties. I eventually got my own place, but I was always careful not to let the increases in my expenditures outpace the increases in my income... House hack a property every 12 months, and in 5-10 years you can be sitting on a pretty solid portfolio.
Regardless of what you do, talk to an experienced lending pro who can help you better understand what lending options are available--and, importantly--what lending options could be available, given hypothetical changes to your finances (for instance, what options could be available if you got a W2 job paying $X/year). This will give you a better sense of what's possible, and what paths might work best for you.
Good luck out there!
@Leo R. that is pretty cool that you were able to do that every 12 months and I think that's a good way to build a portfolio. I think I need to talk to an experienced lender and that's what I'm missing, the lenders that I have talked to were not open to helping me creatively figure this out. I appreciate your response and I will look at these options, thanks!
@Carson DuVall I see you're in Ogden. I'm in SLC. I work with an outstanding mortgage broker, who I've done many deals with; he's excellent at helping me understand my financing options --PM me if you'd like his contact info.
Quote from @Leo R.:
Quote from @Carson DuVall:
Quote from @Leo R.:
@Carson DuVall as @Chris Seveney one option is to get a W2--which can unlock a lot of other options...
Another option (that you could combine with getting a W2) is to do a house hack of a single fam or small multifam property (I'm a huge proponent of house hacking--partly because it can simultaneously increase your income while decreasing your expenditures, thereby "unlocking" other investment opportunities that you might not otherwise have access to--which is the fundamental recipe for building wealth).
For instance, when I was younger, I house hacked a new property almost every 12 months for years on end. I started off living in the cheapest rooms in the properties to maximize my returns, but as my cashflow and net worth increased, I gradually moved up to occupying nicer spots in the properties. I eventually got my own place, but I was always careful not to let the increases in my expenditures outpace the increases in my income... House hack a property every 12 months, and in 5-10 years you can be sitting on a pretty solid portfolio.
Regardless of what you do, talk to an experienced lending pro who can help you better understand what lending options are available--and, importantly--what lending options could be available, given hypothetical changes to your finances (for instance, what options could be available if you got a W2 job paying $X/year). This will give you a better sense of what's possible, and what paths might work best for you.
Good luck out there!
@Leo R. that is pretty cool that you were able to do that every 12 months and I think that's a good way to build a portfolio. I think I need to talk to an experienced lender and that's what I'm missing, the lenders that I have talked to were not open to helping me creatively figure this out. I appreciate your response and I will look at these options, thanks!
@Carson DuVall I see you're in Ogden. I'm in SLC. I work with an outstanding mortgage broker, who I've done many deals with; he's excellent at helping me understand my financing options --PM me if you'd like his contact info.
PM Sent, Thanks Leo!
Hey @Carson DuVall,
I'm also from Ogden and am really involved in all the local real estate meetups! You should come to one of the meetings sometime and we could talk in a lot more detail about potential opportunities and such.
Let me know if you're interested!
Good luck,
#4 Mortgage Brokers & Lenders Contributor
- Washington, DC Mortgage Lender/Broker
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#4 Mortgage Brokers & Lenders Contributor
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Quote from @Carson DuVall:
Hey guys, I am seeking some guidance if possible, and hope this is the right place. I currently have one STR near Yellowstone NP and have about 200k in equity on that property. I am seeking options to buy another rental property but I don't have a W2 job or a lot of capital to fund buying another property. The deed to my rental property has been transferred to my real estate LLC and has 2 years' worth of income on that. Does anyone have any advice or think a certain solution would be best for me? I did talk to a lender about re-financing my property but she advised me not to do that because I would have a much higher interest rate. I just really want to get another property while the bidding wars are no longer a thing. Thanks for taking the time to read this, and I appreciate all of you here on BP.
Hey Carson
Rural could be a problem around Yellowstone. Many DSCR lenders shy away from properties in rural locations although if you're thinking about short term rentals in a vacation spot, that could change their minds. You may be limited to 65% loan to value. Not sure that matters on your purchase though.
Stephanie
There are some good suggestions here. If it were me, I'd look into subject-to and seller financing. It's a bit trickier to find, but if you can get it it will give you the most flexibility. You might even get into a property with no money down. I'd hit up some of those local meet ups and start networking with other investors. Ask if anyone knows of an investor with an STR that they'd like to get out of, you may find a win-win scenario there. Of course you can also go to the MLS and look for properties that have been sitting a long time and start pitching sub-to and/or seller financing. But you really need to understand those strategies so as @Phommala Songkhors mentioned, watch some Pace videos and he'll get you up to speed. He has a group of mentees called Subto's that he pours into and he encourages people to connect with those folks to help with their deals. So you may want to try and find a Subto person in your area to help or even partner with.