Getting approved with no monthly income

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I am trying to get the ball rolling to purchase my first property.  However, I am currently a student and do not have any stable, monthly income.  I have been trying to find out whether or not I will be able to qualify for a mortgage given my situation.  Yesterday, I spoke with a mortgage representative from Wells Fargo and he said I would need 25% down (not a problem) and at least $1500/month in order to qualify for a low 5% loan on a $55k duplex.  Correct me if I am wrong, but I suspect that I will not be qualifying for financing through any large banks (ie. WF, Chase, etc).  This presents a problem to me as I am eager to begin investing, but I am not looking to do an all cash deal at this time.  Currently, I see my options as follows: 

1) Wait-- Obviously, this is not ideal as it would be 2 years until I graduate and enter the workforce.  However, it may be necessary if it is mandatory to have some form of reliable income. 

2) Cash-- Feasible, but I would rather invest $13,750 (25% down) rather than $55,000. 

3) Small, Regional/Community Banks-- I do not know if this would be an option.  I have not reached out to any to see if they would be willing to work with me, or if I would meet the same response as I did with Wells Fargo.

4) Private Lenders-- I know that private money lenders are more willing to take higher risk (ie. investing in someone with no track record or income), but at higher interest rates.

5) Owner Financing-- I would imagine that it is harder to find properties where the owner is willing to finance the deal, let alone a deal that is worth doing.

I would greatly appreciate advice from investors who started out young (in college) or started without any monthly income.  Thank you!

[Joseph Zanazan]

Each option you named bring something unique to the table. Its important for the obvious reasons to recognize what you are trying to accomplish as soon as possible and whats available to you as a financing option.

To answer your question, conventional and FHA loans both operate under the parameters set forth by Fannie Mae and Freddie Mac. When reviewing your application, besides how much money you make, your banker and underwriter will take into consideration how and where this income is generated from. Whether you're a wage-earner receiving a W2 at the end of the year or you're 1099'd, each criteria comes with its own set of guidelines and conditions. Although its always recommended to provide documentation verifying the history of a two year period of income, this particular guideline isn't one that's set in stone with no possibility of exception. Income that has been received for a shorter period of time may be considered acceptable as long as the borrower's income & employment profile demonstrates compensating factors to reasonably offset the shorter income history. If you're relying on overtime or bonus income for qualifying purposes, make sure you have at least 12 months under your belt to be considered stable.

Private lenders and owner financing are going to resemble more hard money. These types of financing differ from traditional mortgage financing in the sense that credit is extended based on the merits of the deal or hard asset, not your credit per se.

My best advice to you is to do as much research as possible and talk to as many licensed agents as possible about your situation. Conversations and research will familiarize you with the process and even if you can't do something today, it will make you way more prepared for tomorrow. Sounds like you're eventually going to have to come around to this situation at least a time or two in your lifetime. Since i am licensed in CA, I would be more than happy to help you with your efforts at trying to obtain financing and answer any questions in the process.