Tricky Lending Situation

[Luke Berry]

I house hacked my Primary Residence for $580,000.00 In January of 2021 ($3,000/month PITI, 548k Principal balance remaining). I originally thought that I could qualify for the loan by myself because my 3 roommates were paying me $675/month/person; however, I was unable to utilize that income for the debt to income calculations at the time. As a result, I had to bring my parents on as cosigners to not pass up a great deal.

Now that my roommates are getting ready to move out, I want to turn it into a STR & buy another primary residence (300-350k range) using 5% down. I quit my comfortable W-2 job in August to get into wholesaling which has already made me more than my old job did in a year, but I am now unable to refi my current residence or get a new mortgage because I'm self employed.

 I have about $100k liquid but would prefer to preserve as much as possible given how cheap debt is at the moment. How can I work around this in order to achieve my goals? 

- Keep my current residence as a STR (preferably on a low interest rate - currently 3%, 30 yr).

- Get my parents off of the cosign

- Buy another property using 5% down.

I am open to all ideas of how to get out of this tricky situation.

[Colleen F.]

@Luke Berry I hate to squash your dream but if you have only been wholesaling since August it is unlikely you can find a lender to lend on a new property as an owner occupant. You don't even have 6 months self employed. Your best bet if you want to STR your current home is to rent yourself a much more modest place until you have enough cash or self employed history to buy. Another option may be to make an inlaw suite in your current home and rent the remainder as a STR until such time as you can buy the second home. You have to establish that your wholesaling is going to support you in the long term. Did your lender give you any idea or when the rental income could count to get your parents off the loan?